What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-11 compared with 2024-02-08 · 524 added, 440 removed, 2111 unchanged (31% of the section changed)

29 unchanged sentences

Variable Interest Entities

Exit Activities and Discontinued Operations

Exit Activities and Asset Sales

Reports of Independent Registered Public Accounting Firm (PCAOB ID 238 )

51 unchanged sentences

Net gain arising during the period, net of tax of $ 1 , $ 2 , and $ —

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 $ — , $ — , and $ 1

2 unchanged sentences

Unrealized gain on derivative instruments, net of tax of $ — , $ — , and $ 1

Reclassification adjustments included in net income, net of tax of $ — , $ — , and $ 1

Reclassification adjustments included in net income, net of tax of $ — for all periods

Other Comprehensive Income 5 6 7

3 unchanged sentences

The accompanying notes are an integral part of these statements.

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CMS Energy Corporation

10 unchanged sentences

Other non‑cash operating activities and reconciling adjustments ( 241 ) ( 274 ) ( 93 )

Net cash used in discontinued operations — — ( 111 )

Changes in assets and liabilities

9 unchanged sentences

Net proceeds from sale of EnerBank — — 5

Net cash provided by discontinued operations — — 78

Proceeds from sale of ASP business 124 — —

Cost to retire property and other investing activities ( 160 ) ( 167 ) ( 107 )

4 unchanged sentences

Retirement of debt ( 952 ) ( 2,132 ) ( 106 )

Increase in notes payable 73 20 —

Increase (decrease) in notes payable ( 28 ) 73 20

Issuance of common stock 286 192 69

Issuance of preferred stock, net of issuance costs — — 224

Payment of dividends on common and preferred stock ( 626 ) ( 579 ) ( 544 )

Proceeds from the sale of membership interest in VIE to tax equity investor — 86 49

Contribution from noncontrolling interest 6 2 1

Net cash used in discontinued operations — — ( 84 )

Contributions from noncontrolling interests 5 6 2

Distributions to noncontrolling interests ( 12 ) ( 12 ) ( 4 )

Other financing costs ( 21 ) ( 42 ) ( 58 )

Net cash provided by (used in) financing activities 1,143

1,327 ( 295 )

Net cash provided by financing activities 614

Years Ended December 31 2024 2023 2022

5 unchanged sentences

Interest paid (net of amounts capitalized) $ 677 $ 607 $ 490

Income taxes paid 15 1 16

Income taxes paid (proceeds from sale of renewable energy tax credits), net ( 69 ) 15 1

Non‑cash transactions

1 unchanged sentence

The accompanying notes are an integral part of these statements.

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CMS Energy Corporation

84 unchanged sentences

Net gain arising during the period 2 5 1

Settlement arising during the period — — 1

Prior service credit adjustment 1 — —

Amortization of net actuarial loss 2 2 4

3 unchanged sentences

At beginning of period

— ( 3 ) ( 6 )

Unrealized gain on derivative instruments

9 unchanged sentences

Cumulative Redeemable Perpetual Preferred Stock, Series C

At beginning of period 224 224 —

Preferred stock issued, net of issuance costs — — 224

At end of period 224 224 224

At beginning and end of period 224 224 224

In Millions, Except Number of Shares in Thousands and Per Share Amounts

4 unchanged sentences

Sale of membership interest in VIE to tax equity investor — 86 49

Contribution from noncontrolling interest 6 2 1

Contributions from noncontrolling interests 5 6 2

Distributions to noncontrolling interests ( 12 ) ( 12 ) ( 4 )

Loss attributable to noncontrolling interests ( 56 ) ( 79 ) ( 24 )

Distributions and other changes in noncontrolling interests ( 12 ) ( 4 ) ( 2 )

At end of period 518 581 580

40 unchanged sentences

Net gain (loss) arising during the period, net of tax of $ 1 , $ — , and $ 5

Amortization of net actuarial loss, net of tax of $ — , $ — , and $ 1

Amortization of net actuarial loss, net of tax of $ — for all periods

Other Comprehensive Income 4 — 17

22 unchanged sentences

Covert Generating Station acquisition — ( 812 ) —

Proceeds from sale of ASP business 124 — —

Cost to retire property and other investing activities ( 154 ) ( 141 ) ( 105 )

3 unchanged sentences

Retirement of debt ( 389 ) ( 1,654 ) ( 28 )

Increase in notes payable 73 20 —

Increase (decrease) in notes payable – related parties ( 75 ) ( 317 ) 85

Increase (decrease) in notes payable ( 28 ) 73 20

Decrease in notes payable – related parties — ( 75 ) ( 317 )

Stockholder contribution 735 475 685

Return of stockholder contribution ( 320 ) — —

Payment of dividends on common and preferred stock ( 797 ) ( 697 ) ( 771 )

8 unchanged sentences

Interest paid (net of amounts capitalized) $ 484 $ 417 $ 309

Income taxes paid (refunds received), net 31 ( 2 ) ( 10 )

Income taxes paid (proceeds from sale of renewable energy tax credits), net ( 19 ) 31 ( 2 )

Non‑cash transactions

36 unchanged sentences

Notes payable 65 93

Notes payable – related parties — 75

Accounts payable 917 764

38 unchanged sentences

Stockholder contribution 735 475 685

Return of stockholder contribution ( 320 ) — —

At end of period 8,174 7,759 7,284

55 unchanged sentences

For details regarding CMS Energy’s and Consumers’ derivative instruments recorded at fair value, see Note 5, Fair Value Measurements.

Electricity Market Transactions:

Wholesale electricity market operators require the submission of hourly day-ahead and real-time bids and offers for energy at locations across each region.

CMS Energy and Consumers account for such transactions on a net hourly basis in each of the real-time and day-ahead markets, netted across all locations in the energy market.

CMS Energy and Consumers record net hourly purchases in purchased and interchange power and net hourly sales in operating revenue on their consolidated statements of income.

They record net billing adjustments upon receipt of settlement statements, record accruals for future net purchases and sales adjustments based on historical experience, and reconcile accruals to actual expenses and sales upon receipt of settlement statements.

CMS Energy calculates basic and diluted EPS using the weighted-average number of shares of common stock and dilutive potential common stock outstanding during the period.

18 unchanged sentences

CMS Energy and Consumers use the weighted-average cost method for valuing working gas, recoverable base gas in underground storage facilities, and materials and supplies inventory.

and Consumers also use this method for valuing coal inventory, and they classify these amounts as generating plant fuel stock on their consolidated balance sheets.

CMS Energy and Consumers also use this method for valuing coal inventory, and they classify these amounts as generating plant fuel stock on their consolidated balance sheets.

CMS Energy and Consumers account for RECs and emission allowances as inventory and use the weighted-average cost method to remove amounts from inventory.

2 unchanged sentences

CMS Energy and Consumers evaluate inventory for impairment as required to ensure that its carrying value does not exceed the lower of cost or net realizable value.

MISO Transactions:

MISO requires the submission of hourly day-ahead and real-time bids and offers for energy at locations across the MISO region.

CMS Energy and Consumers account for MISO transactions on a net hourly basis in each of the real-time and day-ahead markets, netted across all MISO energy market locations.

CMS Energy and Consumers record net hourly purchases in purchased and interchange power and net hourly sales in operating revenue on their consolidated statements of income.

Property Taxes:

8 unchanged sentences

• Note 10, Retirement Benefits

• Note 11, Stock-based Compensation

• Note 12, Income Taxes

4 unchanged sentences

Regulatory matters are critical to Consumers.

The Michigan Attorney General, ABATE, the MPSC Staff, residential customer advocacy groups, environmental organizations, and certain other parties typically participate in MPSC proceedings concerning Consumers, such as Consumers’ rate cases and PSCR and GCR processes.

Intervenors also participate in certain FERC matters, including FERC’s regulation of certain wholesale rates that affect Consumers’ power supply costs.

3 unchanged sentences

Consumers cannot predict the outcome of these proceedings.

There are multiple appeals pending that involve various issues concerning cost recovery from customers, the MPSC’s authority to approve voluntary revenue refunds, and other matters.

Consumers is unable to predict the outcome of these appeals.

Regulatory Assets and Liabilities

11 unchanged sentences

$ 1,266 $ 1,265

Securitized costs 1

Postretirement benefits 4

2022 PSCR underrecovery 1

Unamortized loss on reacquired debt 1

Securitized costs 1

Decommissioning costs 3

Unamortized loss on reacquired debt 1

Energy waste reduction plan incentive 2

Retention incentive program 3

Postretirement benefits expense deferral mechanism 3

Energy waste reduction plan 3

Ludington overhaul contract dispute 3

Postretirement benefits expense deferral mechanism 3

Retention incentive program 3

2022 PSCR underrecovery 1

Total non-current regulatory assets $ 3,569 $ 3,683

2 unchanged sentences

Income taxes, net $ 53 $ 49

Reserve for customer refunds 2 47

ASP gain 47 —

Total current regulatory liabilities $ 111 $ 56

1 unchanged sentence

Income taxes, net 1,163 1,220

Renewable energy grant 43 45

Renewable energy plan 51 29

ASP gain 46 —

Energy waste reduction plan 41 25

Renewable energy grant 40 43

Postretirement benefits expense deferral mechanism 37 12

16 unchanged sentences

Consumers recognized incentive revenue under this program of $ 58 million in 2023.

Consumers also exceeded its statutory savings targets in 2023, achieved certain other goals, and will request the MPSC’s approval to collect $ 58 million, the maximum performance incentive, in the energy waste reduction reconciliation to be filed in May 2024.

Consumers also exceeded its statutory savings targets in 2024, achieved certain other goals, and will request the MPSC’s approval to collect $ 64 million in the energy waste reduction reconciliation to be filed in May 2025.

Consumers recognized incentive revenue under this program of $ 64 million in 2024.

4 unchanged sentences

The MPSC has approved deferred accounting treatment for the retention and severance costs incurred under these programs and has allowed for recovery over three years.

For additional details regarding the retention incentive program, see Note 19, Exit Activities and Discontinued Operations.

For additional details regarding the retention incentive program, see Note 19, Exit Activities and Asset Sales.

Costs of Coal-fueled Electric Generating Units to be Retired:

In June 2022, the MPSC approved Consumers’ Clean Energy Plan, under which Consumers plans to retire the J.H.

In 2022, the MPSC approved Consumers’ plans to retire the J.H.

Campbell coal-fueled generating units in 2025.

1 unchanged sentence

Until retirement, the book value of the generating units will remain in rate base and receive full regulatory returns in general rate cases.

In June 2022, Consumers removed from total plant, property, and equipment an amount of $ 1.3 billion, representing the projected remaining book value of the electric generating units upon their retirement, and recorded it as a non ‑ current regulatory asset on its consolidated balance sheets.

In 2022, Consumers removed from total plant, property, and equipment an amount of $ 1.3 billion, representing the projected remaining book value of the electric generating units upon their retirement, and recorded it as a non ‑ current regulatory asset on its consolidated balance sheets.

Postretirement Benefits:

As part of the ratemaking process, the MPSC allows Consumers to recover the costs of postretirement benefits.

Accordingly, Consumers defers the net impact of actuarial losses and gains, prior service costs and credits, and settlements associated with postretirement benefits as a regulatory asset or liability.

The asset or liability will decrease as the deferred items are amortized and

recognized as components of net periodic benefit cost.

For details about the amortization periods, see Note 10, Retirement Benefits.

Securitized Costs:

The MPSC has issued securitization financing orders authorizing Consumers to issue securitization bonds in order to finance the recovery of the remaining book value of three smaller natural gas-fueled electric generating units that Consumers retired in 2015, seven smaller coal-fueled electric

generating units that Consumers retired in 2016, and the D.E.

Karn coal-fueled electric generating units that Consumers retired in June 2023.

2 unchanged sentences

For additional details regarding the securitization bonds, see Note 4, Financings and Capitalization—Securitization Bonds.

Postretirement Benefits:

As part of the ratemaking process, the MPSC allows Consumers to recover the costs of postretirement benefits.

The asset or liability will decrease as the deferred items are amortized and recognized as components of net periodic benefit cost.

For details about settlements and the amortization periods, see Note 10, Retirement Benefits.

The recovery of the underlying asset investments and related removal and monitoring costs of recorded AROs is approved by the MPSC in depreciation rate cases.

1 unchanged sentence

The recovery period approximates the useful life of the assets to be removed.

Consumers is incurring environmental remediation and other response activity costs at 23 former MGP facilities.

The MPSC allows Consumers to recover from its natural gas customers over a ten ‑ year period the costs incurred to remediate the MGP sites.

For additional information, see Note 3, Contingencies and Commitments—Consumers Gas Utility Contingencies—Gas Environmental Matters.

Unamortized Loss on Reacquired Debt:

Under regulatory accounting, any unamortized discount, premium, or expense related to debt redeemed with the proceeds of new debt is capitalized and amortized over the life of the new debt.

Decommissioning Costs:

4 unchanged sentences

Campbell coal-fueled generating units that will be retired in 2025.

Postretirement Benefits Expense Deferral Mechanism:

In Consumers’ general rate cases, the MPSC approved a mechanism allowing Consumers to defer the future recovery or refund of pension and OPEB expenses above or below the amounts used to set existing rates, respectively, beginning in January 2023 for the electric utility and October 2023 for the gas utility.

Unamortized Loss on Reacquired Debt:

Under regulatory accounting, any unamortized discount, premium, or expense related to debt redeemed with the proceeds of new debt is deferred and amortized over the life of the new debt.

Consumers is incurring environmental remediation and other response activity costs at 23 former MGP facilities.

The MPSC allows Consumers to recover from its natural gas customers over a ten ‑ year period the costs incurred to remediate the MGP sites.

For additional information, see Note 3, Contingencies and Commitments—Consumers Gas Utility Contingencies.

Energy Waste Reduction Plan:

3 unchanged sentences

Ludington Overhaul Contract Dispute:

The MPSC has authorized Consumers to defer as a regulatory asset costs associated with repairing or replacing defective work performed by TAES during a major overhaul and upgrade of Ludington.

The MPSC has authorized Consumers to defer as a regulatory asset costs associated with correcting incomplete, nonconforming, and defective work performed by TAES during a major overhaul and upgrade of Ludington.

Consumers will defer such costs while litigation with TAES and Toshiba moves forward;

such costs will be offset by potential future litigation proceeds received from

TAES or Toshiba.

such costs will be offset by potential future litigation proceeds received from TAES or Toshiba.

Consumers has also deferred replacement power costs due to outages resulting from correcting this work.

Consumers will have the opportunity to seek appropriate recovery and ratemaking treatment for amounts recorded as a regulatory asset following resolution of the litigation.

For additional details on the contract dispute, see Note 3, Contingencies and Commitments—Consumers Electric Utility Contingencies.

Postretirement Benefits Expense Deferral Mechanism:

In Consumers’ general rate cases, the MPSC approved a mechanism allowing Consumers to defer for future recovery or refund pension and OPEB expenses above or below the amounts used to set existing rates.

Amounts deferred will be collected from or refunded to customers over ten years.

Regulatory Liabilities

4 unchanged sentences

For additional details on deferred income taxes, see Note 12, Income Taxes.

Reserve for Customer Refunds:

In December 2022, the MPSC issued an order authorizing Consumers to refund $ 22 million voluntarily to utility customers.

During 2023, the MPSC approved Consumers’ requests that the refund take the form of contributions to programs that assist vulnerable electric and gas customers and incremental vegetation management.

Additionally, in the settlement of its 2022 electric rate case, Consumers agreed to refund voluntarily $ 15 million of 2022 revenues to utility customers through a one ‑ time bill credit and to fund $ 10 million in contributions to programs that directly assist vulnerable customers with utility bills.

In April 2024, Consumers sold its unregulated ASP business to a non-affiliated company, resulting in a $ 110 million gain.

In July 2024, the MPSC approved the utilization of $ 27.5 million, or one-fourth, of the gain on the sale as an offset to the revenue deficiency in lieu of additional rate relief during the 12‑month period beginning October 1, 2024, with the remaining three-fourths of the gain, or $ 82.5 million, to be credited to customers as a bill credit over a three-year period beginning October 1, 2024.

Cost of Removal:

1 unchanged sentence

This regulatory liability is reduced as costs are incurred to remove the assets at the end of their useful lives.

Renewable Energy Plan:

Consumers has collected surcharges to fund its renewable energy plan.

Amounts not yet spent under the plan are recorded as a regulatory liability, which is amortized as incremental costs are incurred to operate and depreciate Consumers’ renewable generation facilities and to purchase RECs under renewable energy purchase agreements.

Incremental costs represent costs incurred in excess of amounts recovered through the PSCR process.

Renewable Energy Grant:

3 unchanged sentences

Consumers presents the amortization as a reduction to maintenance and other operating expenses on its consolidated statements of income.

Renewable Energy Plan:

Consumers has collected surcharges to fund its renewable energy plan.

Incremental costs represent costs incurred in excess of amounts recovered through the PSCR process.

Consumers Electric and Gas Utility

Meter Investigation:

In July 2023, the MPSC issued an order initiating an investigation into Consumers’ handling of malfunctioning meters and meters requiring transition from 3G to 4G technology, estimated billing, and new service installations.

In July 2023, the MPSC issued an order initiating an investigation into Consumers’ handling of malfunctioning meters and meters requiring transition from 3G to 4G, estimated billing, and new service installations.

The order directed Consumers to provide information on such meters and their replacement, meter-reading performance, communications with customers and the MPSC regarding these issues, and other information.

Consumers provided this information in August 2023.

As directed in the order, the MPSC Staff analyzed this information and made recommendations, including continued monitoring of Consumers’ performance in these areas and penalties for failure to comply with MPSC service rules.

In October 2023, the MPSC issued a show-cause order directing Consumers to provide further information on consecutive estimated billings, the provision of actual meter readings, and new service installation issues.

Consumers cannot predict the outcome of this matter, but it could be subject to regulatory penalties that are not expected to have a material effect on Consumers’ results of operations and Consumers could be subject to increased regulatory scrutiny.

Subsequently, the MPSC issued a show-cause order directing Consumers to provide further information on consecutive estimated billings, the provision of actual meter readings, and new service installation issues.

In May 2024, the MPSC approved a settlement agreement resolving this matter.

Under the settlement agreement, Consumers paid a $ 1 million penalty to the MPSC and committed to return a minimum of

$ 3 million to customers.

Independent of this agreement, Consumers has made a claim against the associated vendor, with any proceeds to be used to reimburse some or all of Consumers’ $ 3 million commitment and any excess to be returned to customers.

Consumers Electric Utility

2023 Electric Rate Case:

In January 2023, the MPSC approved a settlement agreement authorizing an annual rate increase of $ 155 million, based on a 9.9 ‑percent authorized return on equity.

The MPSC also approved a surcharge for the recovery of $ 6 million of depreciation, property tax, and interest expense related to distribution investments made in 2021 that exceeded what was authorized in rates in accordance with the December 2020 electric rate order.

The new rates became effective January 20, 2023.

In May 2023, Consumers filed an application with the MPSC seeking a rate increase of $ 216 million, based on an authorized return on equity of 10.25 percent for the projected 12 ‑ month period ending February 28, 2025.

In September 2023, Consumers revised its requested increase to $ 169 million.

The filing requested authority to recover costs related to new infrastructure investment primarily in distribution system reliability and cleaner energy resources.

In March 2024, the MPSC issued an order authorizing an annual rate increase of $ 92 million, which is inclusive of a $ 9 million surcharge for the recovery of select distribution investments made in 2022 that exceeded the rates authorized in accordance with the December 2021 electric rate order.

The approved rate increase is based on a 9.9 ‑percent authorized return on equity.

The new rates became effective March 15, 2024.

Consumers Gas Utility

2023 Gas Rate Case:

In December 2022, Consumers filed an application with the MPSC seeking an annual rate increase of $ 212 million, based on a 10.25 ‑percent authorized return on equity for the projected 12 ‑ month period ending September 30, 2024.

In August 2023, the MPSC approved a settlement agreement authorizing an annual rate increase of $ 95 million, based on a 9.9 ‑percent authorized return on equity, effective October 1, 2023.

The MPSC also authorized the use of a cost deferral mechanism that will allow Consumers to defer for future recovery or refund pension and OPEB expense above or below the amounts used to set existing rates.

In December 2023, Consumers filed an application with the MPSC seeking an annual rate increase of $ 136 million based on a 10.25 ‑percent authorized return on equity for the projected test year comprising the 12‑month period ending September 30, 2025.

In May 2024, Consumers revised its requested increase to $ 113 million.

The filing requested authority to recover new infrastructure investment and related costs that are expected to allow Consumers to continue to provide safe, reliable, affordable, and increasingly cleaner natural gas service.

In July 2024, the MPSC approved a settlement agreement authorizing an annual rate increase of $ 35 million, based on a 9.9 ‑percent authorized return on equity.

Additionally, the settlement approves the use of $ 27.5 million, or one-fourth, of the gain on the sale of Consumers’ unregulated ASP business as an offset to the revenue deficiency in lieu of additional rate relief during the test year.

This results in effective rate relief of $ 62.5 million for the test year.

The settlement agreement also provides for the remaining three-fourths of the $ 110 million gain on the sale of the ASP business, or $ 82.5 million, to be provided to customers as a bill credit over a three-year period.

The new rates, including the bill credit, became effective October 1, 2024.

The settlement also authorizes the continuation of the cost deferral mechanism allowing Consumers to defer for future recovery or refund pension and OPEB expense above or below the amounts used to set rates.

For additional details on Consumers’ sale of its ASP business, see Note 19, Exit Activities and Asset Sales.

Power Supply Cost Recovery and Gas Cost Recovery

4 unchanged sentences

overrecoveries represent previously collected revenues that will be refunded to customers.

Presented in the following table are the assets and liabilities for PSCR and GCR underrecoveries and overrecoveries reflected on Consumers’ consolidated balance sheets:

Presented in the following table are the liabilities for PSCR and GCR overrecoveries reflected on Consumers’ consolidated balance sheets:

December 31 2024 2023

PSCR underrecoveries $ — $ 401

GCR underrecoveries — 8

Accounts receivable and accrued revenue $ — $ 409

PSCR overrecoveries $ 13 $ 10

2 unchanged sentences

PSCR Plans and Reconciliations:

In September 2023, the MPSC issued an order in Consumers’ 2021 PSCR reconciliation, authorizing recovery of $ 2.1 billion of power costs and authorizing Consumers to reflect in its 2022 PSCR reconciliation the overrecovery of $ 7 million.

As a result of rising fuel prices during 2022, Consumers’ power supply costs for 2022 were significantly higher than those projected in its 2022 PSCR plan, resulting in a substantial amount of under-recovered power supply costs.

In March 2023, Consumers filed its 2022 PSCR reconciliation, requesting full recovery of $ 2.5 billion of power costs and authorization to reflect in its 2023 PSCR reconciliation the underrecovery of $ 404 million.

In November 2023, Consumers revised its reconciliation, requesting authorization to reflect in its 2023 PSCR reconciliation the underrecovery of $ 401 million.

Consumers submitted its 2023 PSCR plan to the MPSC in September 2022 and self-implemented a 2023 PSCR charge in accordance with that plan in January 2023.

As a result of significantly higher-than-projected power costs during 2022, Consumers subsequently filed a motion for a temporary order in its 2023 PSCR plan, requesting that the MPSC approve only a third of the 2022 underrecovery amount for recovery in 2023, with the remaining amount to be recovered equally during 2024 and 2025.

The MPSC approved Consumers’ motion in February 2023, providing immediate relief to electric customers.

The MPSC approved Consumers’ 2023 PSCR plan in August 2023.

In March 2024, Consumers filed its 2023 PSCR reconciliation, requesting full recovery of $ 1.8 billion of power costs and authorization to reflect in its 2024 PSCR reconciliation the underrecovery of $ 255 million.

Consumers submitted its 2024 PSCR plan to the MPSC in September 2023 and, in accordance with its proposed plan, self-implemented the 2024 PSCR charge beginning in January 2024.

GCR Plans and Reconciliations:

In March 2023, the MPSC approved a settlement agreement in Consumers’ 2021-2022 GCR reconciliation, authorizing recovery of $ 0.7 billion of gas costs and authorizing Consumers to reflect in its 2022-2023 GCR reconciliation the underrecovery of $ 9 million.

In June 2023, Consumers filed its 2022-2023 GCR reconciliation, requesting full recovery of $ 1.1 billion of gas costs and authorization to reflect in its 2023-2024 GCR reconciliation the underrecovery of $ 15 million.

In March 2024, the MPSC approved a settlement agreement in Consumers’ 2022-2023 GCR reconciliation, authorizing full recovery of $ 1.1 billion of gas costs and authorizing Consumers to reflect in its 2023-2024 GCR reconciliation the underrecovery of $ 15 million.

Consumers submitted its 2023-2024 GCR plan to the MPSC in December 2022 and self-implemented its proposed 2023-2024 GCR charge in April 2023.

The MPSC approved Consumers’ 2023-2024 GCR plan in June 2024.

Also, in June 2024, Consumers filed its 2023-2024 GCR reconciliation, requesting recovery of $ 0.5 billion of gas costs and authorization to reflect in its 2024-2025 GCR reconciliation the overrecovery of $ 3 million.

Consumers submitted its 2024 ‑ 2025 GCR plan to the MPSC in December 2023 and, in accordance with its proposed plan, self-implemented the 2024 ‑ 2025 GCR charge beginning in April 2024.

The MPSC approved Consumers’ 2024-2025 GCR plan in August 2024.

Contingencies and Commitments

8 unchanged sentences

CMS Land completed all construction necessary to implement the remedies required by the agreement and will continue to maintain and operate a system to discharge treated leachate into Little Traverse Bay under an NPDES permit, which is valid through 2025.

CMS Land will submit the required renewal request in April 2025, and will continue to operate under the existing permit until a renewal is issued.

At December 31, 2024, CMS Energy had a recorded liability of $ 48 million for its remaining obligations for environmental remediation.

CMS Energy calculated this liability based on discounted projected costs, using a discount rate of 4.34 percent and an inflation rate of one percent on annual operating and

maintenance costs.

CMS Energy calculated this liability based on discounted projected costs, using a discount rate of 4.34 percent and an inflation rate of one percent on annual operating and maintenance costs.

The undiscounted amount of the remaining obligation is $ 61 million.

12 unchanged sentences

Consumers estimates its liability for NREPA sites for which it can estimate a range of loss to be between $ 4 million and $ 5 million.

At December 31, 2023, Consumers had a recorded liability of $ 2 million, the minimum amount in the range of its estimated probable NREPA liability, as no amount in the range was considered a better estimate than any other amount.

At December 31, 2024, Consumers had

a recorded liability of $ 4 million, the minimum amount in the range of its estimated probable NREPA liability, as no amount in the range was considered a better estimate than any other amount.

Consumers is a potentially responsible party at a number of contaminated sites administered under CERCLA.

10 unchanged sentences

Consumers periodically reviews these cost estimates.

A change in the underlying assumptions, such as an increase in the number of sites, different remediation techniques, the

nature and extent of contamination, and legal and regulatory requirements, could affect its estimates of NREPA and CERCLA liability.

A change in the underlying assumptions, such as an increase in the number of sites, different remediation techniques, the nature and extent of contamination, and legal and regulatory requirements, could affect its estimates of NREPA and CERCLA liability.

Ludington Overhaul Contract Dispute:

Consumers and DTE Electric, co-owners of Ludington, are parties to a 2010 engineering, procurement, and construction agreement with TAES, under which TAES contracted to perform a major overhaul and upgrade of Ludington.

The overhauled Ludington units are operational, but TAES’ work has been defective and non ‑ conforming.

Consumers and DTE Electric have demanded that TAES provide a comprehensive plan to resolve those matters, including adherence to its warranty commitments and other contractual obligations.

Consumers and DTE Electric have taken extensive efforts to resolve these issues with TAES, including a formal demand to TAES’ parent, Toshiba, under a parent guaranty it provided.

TAES has not provided a comprehensive plan or otherwise met its performance obligations.

In order to enforce the contract, Consumers and DTE Electric filed a complaint against TAES and Toshiba in the U.S.

District Court for the Eastern District of Michigan in April 2022.

In June 2022, TAES and Toshiba filed a motion to dismiss the complaint, along with an answer and counterclaims seeking approximately $ 15 million in damages related to payments allegedly owed under the parties’ contract.

Consumers and DTE Electric, co-owners of Ludington, entered into a 2010 engineering, procurement, and construction agreement with Toshiba International Corporation, under which Toshiba International Corporation contracted to perform a major overhaul and upgrade of Ludington.

Toshiba International Corporation later assigned the contract and all of its obligations to TAES.

TAES’ work under the contract was incomplete, defective, and non ‑ conforming.

Consumers and DTE Electric repeatedly documented TAES’ failure to perform under the contract and demanded that TAES provide a comprehensive plan to resolve those matters, including adherence to its warranty commitments and other contractual obligations.

Consumers and DTE Electric engaged in extensive efforts to resolve these issues with TAES, including a formal demand to TAES’ parent, Toshiba, under a parent guaranty it provided.

TAES did not provide a comprehensive plan or otherwise meet its performance obligations.

As a result of TAES’ defaults, Consumers and DTE Electric terminated the contract.

In order to enforce their rights under the contract and parent guaranty, and to pursue appropriate damages, Consumers and DTE Electric filed a complaint against TAES and Toshiba in the U.S.

District Court for the Eastern District of Michigan in 2022.

TAES and Toshiba filed a motion to dismiss the complaint, along with an answer and counterclaims seeking approximately $ 15 million in damages related to payments allegedly owed under the parties’ contract.

As a co-owner of Ludington, Consumers would be liable for 51 percent of any such damages, if liability and damages were proven.

In September 2022, the court denied the motion to dismiss filed by TAES and Toshiba.

The court denied the motion to dismiss filed by TAES and Toshiba.

The parties are engaged in ongoing litigation, including discovery, pursuant to a court-ordered schedule.

1 unchanged sentence

An unfavorable outcome could have a material adverse effect on CMS Energy’s and Consumers’ financial condition, results of operations, or liquidity.

Toshiba has announced that, through a common stock purchase, TBJH became the majority shareholder and new parent company of Toshiba.

In 2023, Toshiba announced that TBJH became the majority shareholder and new parent company of Toshiba through a common stock purchase.

TBJH is a subsidiary of a Japanese private equity firm.

1 unchanged sentence

In May 2023, the MPSC approved Consumers’ and DTE Electric’s jointly-filed request for authority to defer as a regulatory asset the costs associated with repairing or replacing the defective work performed by TAES while the litigation with TAES and Toshiba moves forward.

such costs will be offset by potential future litigation proceeds received from TAES or Toshiba.

Consumers and DTE Electric will have the opportunity to seek appropriate recovery and ratemaking treatment for amounts recorded as a regulatory asset following resolution of the litigation, but cannot predict the financial impact or outcome of such proceedings.

Campbell 3 Plant Retirement Contract Dispute:

In May 2022, Consumers filed a complaint against Wolverine Power in the Ottawa County Circuit Court and requested a ruling that Consumers has sole authority to decide to retire the J.H.

Campbell 3 coal-fueled generating unit under the unit’s Joint Ownership and Operating Agreement.

In July 2022, Wolverine Power filed an answer, affirmative defenses, and a counterclaim seeking approximately $ 37 million in damages allegedly caused by Consumers’ decision to retire the unit before the end of its useful life.

In October 2022, the state circuit court judge found that Consumers may, in its sole discretion, retire the J.H.

Campbell 3 coal-fueled generating unit, provided that Consumers continues to operate and make necessary improvements to the unit while the litigation concerning Wolverine Power’s claim for damages is pending.

Although discovery in the litigation is ongoing, Consumers currently estimates that its share of repair, replacement, and other damages resulting from TAES’ defective work is approximately $ 350 million, which may be offset in part or entirely by any potential future litigation proceeds received from TAES or Toshiba.

Consumers and DTE Electric will have the opportunity to seek appropriate recovery and ratemaking treatment for amounts recorded as a regulatory asset following resolution of the litigation, including any amounts not recovered from TAES or Toshiba, but cannot predict the financial impact or outcome of such proceedings.

Campbell 3 Contract Dispute:

In 2022, Consumers filed a complaint against Wolverine Power in the Ottawa County Circuit Court and requested a ruling that Consumers has sole authority to decide to retire the J.H.

Campbell 3 coal-fueled generating unit under Consumers’ and Wolverine Power’s agreement to jointly own and operate the unit.

Wolverine Power filed an answer, affirmative defenses, and a counterclaim seeking approximately $ 37 million in damages allegedly caused by Consumers’ decision to retire the unit before the end of its useful life.

The state circuit court judge found that Consumers may, in its sole discretion, retire J.H.

Campbell 3, provided that Consumers continues to operate and make necessary improvements to the unit while the litigation concerning Wolverine Power’s claim for damages is pending.

In May 2023, the circuit court judge issued an order granting Consumers’ motion for clarification confirming that Consumers may continue to operate and invest in J.H.

Campbell 3 consistent with the May 2025 retirement date.

Consumers believes Wolverine Power’s claim has no merit, but cannot predict the final impact or outcome on this matter.

An unfavorable outcome could have a material adverse effect on CMS Energy’s and Consumers’ financial condition, results of operations, or liquidity.

In March 2024, the circuit court judge issued an order denying Wolverine Power’s motion for partial summary disposition and granting in part and denying in part Consumers’ motion for summary disposition.

The judge granted Consumers’ motion for summary disposition on Wolverine Power’s claim that Consumers acted in bad faith in deciding to retire J.H.

Campbell 3 early, finding no evidence to support that claim.

The judge held that Wolverine Power did identify a genuine issue of material fact as to whether Consumers breached the joint ownership and operating agreement by failing to notify and consult with Wolverine Power regarding the unit’s early retirement.

In June 2024, the parties entered into a settlement agreement resolving this matter.

The settlement agreement provides for Wolverine Power’s interest in J.H.

Campbell 3 to end as of the date the unit permanently ceases to be used for electric operations.

The court entered an order of dismissal with prejudice in June 2024.

Consumers Gas Utility Contingencies

Gas Environmental Matters:

Consumers expects to incur remediation and other response activity costs at a number of sites under NREPA.

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At December 31, 2024, Consumers had a regulatory asset of $ 90 million related to the MGP sites.

Consumers estimates that its liability to perform remediation and other response activities at NREPA sites other than the MGP sites could reach $ 1 million.

At December 31, 2023, Consumers had a recorded liability of less than $ 1 million, the minimum amount in the range of its estimated probable liability, as no amount in the range was considered a better estimate than any other amount.

Presented in the following table are CMS Energy’s and Consumers’ guarantees at December 31, 2024:

7 unchanged sentences

2011 indefinite $ 30 $ —

1 These obligations arose from the sale of membership interests in NWO Holdco, Aviator Wind, and Newport Solar Holdings to tax equity investors.

1 These obligations arose from the sale of membership interests in Aviator Wind, Newport Solar Holdings, and NWO Holdco to tax equity investors.

NorthStar Clean Energy provided certain indemnity obligations that protect the tax equity investors against losses incurred as a result of breaches of representations and warranties under the associated limited liability company agreements.

obligations are generally capped at an amount equal to the tax equity investor’s capital contributions plus a specified return, less any distributions and tax benefits it receives, in connection with its membership interest.

These obligations are generally capped at an amount equal to the tax equity investor’s capital contributions plus a specified return, less any distributions and tax benefits it receives, in connection with its membership interest.

For any indemnity obligations related to Aviator Wind, NorthStar Clean Energy would recover 49 percent of any amounts paid to the tax equity investor from the other owner of Aviator Wind Equity Holdings.

Additionally, Aviator Wind holds insurance coverage that would partially protect against losses incurred as a result of certain failures to qualify for production tax credits.

For further details on NorthStar Clean Energy’s ownership interest in NWO Holdco, Aviator Wind, and Newport Solar Holdings, see Note 18, Variable Interest Entities.

For further details on NorthStar Clean Energy’s ownership interest in Aviator Wind, Newport Solar Holdings, and NWO Holdco, see Note 18, Variable Interest Entities.

2 These obligations arose from stock and asset sale agreements under which CMS Energy or a subsidiary of CMS Energy indemnified the purchaser for losses resulting from various matters, including claims related to taxes.

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The commodities and related services include long-term PPAs, natural gas and associated transportation, and coal and associated transportation.

Related-party PPAs are between Consumers and certain affiliates of NorthStar Clean

Related-party PPAs are between Consumers and certain affiliates of NorthStar Clean Energy.

Presented in the following table are CMS Energy’s and Consumers’ contractual purchase obligations at December 31, 2024 for each of the periods shown:

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Presented in the following table is CMS Energy’s long-term debt at December 31:

In Millions, Except Interest Rate and Maturity

Interest Rate

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Convertible senior notes 1

3.375 2028 $ 800 $ 800

Junior subordinated notes 2

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5.875 2079 630 630

$ 2,010 $ 2,010

Term loan facilities variable 5

2025 $ 90 $ —

Total CMS Energy, parent only $ 5,025 $ 4,785

2 unchanged sentences

NorthStar Clean Energy, including subsidiaries

Term loan facility variable 2023 — 100

Revolving credit facility variable 7

Total principal amount outstanding $ 16,545 $ 15,648

3 unchanged sentences

Total long-term debt $ 15,194 $ 14,508

1 Holders of the convertible senior notes may convert their notes at their option in accordance with the conditions outlined in the related indenture.

CMS Energy will settle conversions of the notes in accordance with the terms outlined in the related indenture.

The conversion rate will be subject to adjustment for anti-dilutive events and fundamental change and redemption provisions as described in the related indenture.

There are no sinking fund requirements for the notes.

At December 31, 2024, the conversion price for the notes was $ 73.93 per share of common stock.

Unamortized debt costs associated with this issuance were $ 9 million at December 31, 2024.

2 These unsecured obligations rank subordinate and junior in right of payment to all of CMS Energy’s existing and future senior indebtedness.

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4 On December 1, 2030, and every five years thereafter, the notes will reset to an interest rate equal to the five‑year treasury rate plus 2.900 percent.

5 The delayed-draw unsecured term loan credit facility has an interest rate of Term SOFR plus 0.900 percent.

At December 31, 2024, borrowings under the term loan credit facility had a weighted-average interest rate of 5.245 percent.

6 The delayed-draw unsecured term loan credit facility has an interest rate of one-month Term SOFR plus 0.850 percent.

At December 31, 2024, borrowings under the term loan credit facility had a weighted-average interest rate of 5.403 percent.

7 Loans under this facility have an interest rate of one-month Term SOFR plus 1.750 percent less an adjustment of 0.050 percent for green credit advances.

At December 31, 2024, the weighted-average interest rate for the loans issued under this facility was 6.097 percent.

Presented in the following table is Consumers’ long-term debt at December 31:

In Millions, Except Interest Rate and Maturity

Interest Rate

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4.350 2064 250 250

$ 11,395 $ 10,397

In Millions, Except Interest Rate and Maturity

Interest Rate

(%) Maturity 2024 2023

$ 10,397 $ 8,997

Tax-exempt revenue bonds 0.875 2

2035 $ 35 $ 35

2014 Securitization bonds 3.528 4

2023 Securitization bonds 5.322 6

Term loan facility variable 2024 — 1,000

Total principal amount outstanding $ 12,205 $ 11,294

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At December 31, 2024, the interest rates were 4.320 percent for bonds due September 2069, 4.483 percent for bonds due May 2070, and 4.551 percent for bonds due October 2070.

The interest rate for all variable-rate bonds at December 31, 2022 was zero percent.

The interest rate for the variable-rate bonds at December 31, 2023 were 5.346 percent, 5.329 percent, and 5.368 percent, respectively.

The holders of these variable-rate bonds may put them to Consumers for redemption on certain dates prior to their stated maturity, including dates within one year of December 31, 2024.

3 unchanged sentences

5 Principal and interest payments are made semiannually.

6 The weighted-average interest rate for Consumers’ securitization bonds issued through its subsidiary, Consumers 2023 Securitization Funding, was 5.342 percent at December 31, 2023.

6 The weighted-average interest rate for Consumers’ securitization bonds issued through its subsidiary, Consumers 2023 Securitization Funding, was 5.322 percent at December 31, 2024 and 5.342 percent at December 31, 2023.

7 Long-term debt – related parties reflects Consumers’ outstanding debt held by its parent as a result of CMS Energy’s repurchase of Consumers’ first mortgage bonds.

CMS Energy’s Purchase of Consumers’ First Mortgage Bonds:

Presented in the following table is Consumers’ long-term debt—related parties at December 31, 2023:

(In Millions)

Interest Rate (%)

First mortgage bonds due 2060 $ 163 2.500

First mortgage bonds due 2052 106 2.650

First mortgage bonds due 2050 23 3.750

First mortgage bonds due 2050 52 3.100

First mortgage bonds due 2051 27 3.500

First mortgage bonds due 2048 60 4.050

Total principal amount outstanding $ 431

Unamortized discounts ( 3 )

Unamortized issuance costs ( 4 )

Total long-term debt — related parties $ 424

During 2023, CMS Energy purchased these Consumers’ first mortgage bonds for $ 293 million.

On a consolidated basis, CMS Energy’s repurchase of Consumers’ first mortgage bonds was accounted for as a debt extinguishment and resulted in a pre-tax gain of $ 131 million.

Interest expense related to the repurchased bonds was $ 5 million for the year ended December 31, 2023.

Unamortized discounts associated with the repurchase of Consumers’ first mortgage bonds were $ 5 million at December 31, 2024 and $ 3 million at December 31, 2023.

Unamortized issuance costs were $ 7 million at December 31, 2024 and $ 4 million at December 31, 2023.

Presented in the following table is a summary of major long-term debt issuances during 2024:

1 unchanged sentence

CMS Energy, parent only

Convertible senior notes $ 800 3.375 May 2023 May 2028

Term loan credit agreement $ 400 variable September 2024 September 2025

Term loan credit agreement 1

90 variable December 2024 December 2025

Total CMS Energy, parent only $ 490

NorthStar Clean Energy, including subsidiaries

Term loan facility 1

$ 85 variable February 2023 November 2023

Total NorthStar Clean Energy, including subsidiaries $ 85

First mortgage bonds $ 425 4.650 January 2023 March 2028

First mortgage bonds 700 4.625 February 2023 May 2033

First mortgage bonds 115 5.240 May 2023 May 2026

First mortgage bonds 50 5.070 May 2023 May 2029

First mortgage bonds 95 5.170 May 2023 May 2032

First mortgage bonds 140 5.380 May 2023 May 2037

First mortgage bonds 500 4.900 August 2023 February 2029

2023 Securitization bonds 2

250 5.550 December 2023 March 2028

2023 Securitization bonds 2

396 5.210 December 2023 September 2031

First mortgage bonds $ 600 4.600 January 2024 May 2029

First mortgage bonds 700 4.700 August 2024 January 2030

Total Consumers $ 1,300

Total CMS Energy $ 1,790

1 In December 2022, a subsidiary of NorthStar Clean Energy entered into a $ 185 million unsecured term loan credit agreement.

Under this credit agreement, a subsidiary of NorthStar Clean Energy borrowed $ 85 million in 2023.

2 For additional details on the securitization, see Note 2, Regulatory Matters— Securitized Costs.

In January 2024, Consumers issued $ 600 million of first mortgage bonds that mature in May 2029 and bear interest at a rate of 4.600 percent.

The proceeds of the bonds will be used for general corporate purposes.

Issuance of Convertible Senior Notes:

In May 2023, CMS Energy issued an aggregate principal amount of $ 800 million convertible senior notes that bear an interest rate of 3.375 percent and mature in May 2028 unless redeemed, repurchased, or converted earlier.

Unamortized debt costs associated with this issuance were $ 12 million at December 31, 2023.

The convertible senior notes rank equal in right of payment to any of CMS Energy’s unsecured indebtedness that is not subordinated.

There are no sinking fund requirements for the notes.

Holders of the convertible senior notes may convert their notes at their option in accordance with the conditions outlined in the related indenture.

CMS Energy will settle conversions of the notes by paying cash up to the aggregate principal amount of the notes to be converted and paying or delivering, as the case may be, cash, shares of CMS Energy common stock, or a combination of cash and shares of CMS Energy common stock, at its election, in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the notes being converted.

The conversion rate will be subject to adjustment for anti-dilutive events and fundamental change and redemption provisions

as described in the related indenture.

At December 31, 2023, the conversion price for the notes was $ 73.97 per share of common stock.

CMS Energy may redeem for cash all or any portion of the notes, at its option, on or after May 6, 2026 if the last reported sale price of its common stock has been at least 130 percent of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period.

Holders of the convertible senior notes may require CMS Energy to repurchase for cash all or any portion of their notes if a fundamental change, as outlined in the related indenture, occurs.

In both cases, CMS Energy will redeem or repurchase the notes at a price equal to 100 percent of the principal amount of the notes to be redeemed or repurchased, plus accrued and unpaid interest.

1 In December 2024, CMS Energy entered into a $ 200 million unsecured term loan credit agreement and borrowed $ 90 million.

In January 2025, CMS Energy borrowed an additional $ 70 million bearing an interest rate of 5.206 percent.

In February 2025, certain subsidiaries of NorthStar Clean Energy entered into a $ 334 million construction financing agreement and borrowed $ 32 million, bearing an interest rate of 6.600 percent.

Presented in the following table is a summary of major long-term debt retirements during 2024:

(In Millions) Interest Rate (%) Retirement Date Maturity Date

NorthStar Clean Energy, including subsidiaries

Term loan facility $ 185 variable November 2023 November 2023

Total NorthStar Clean Energy, including subsidiaries $ 185

Term loan facility $ 1,000 variable February 2023 January 2024

First mortgage bonds 300 0.350 June 2023 June 2023

First mortgage bonds 325 3.375 August 2023 August 2023

CMS Energy, parent only

Senior notes $ 250 3.875 January 2024 March 2024

Total CMS Energy, parent only $ 250

First mortgage bonds 1

$ 250 3.125 September 2024 August 2024

First mortgage bonds 52 3.190 December 2024 December 2024

Total Consumers $ 302

In January 2024, CMS Energy retired $ 250 million of its senior notes bearing an interest rate of 3.875 percent and an original maturity date of March 2024.

Total CMS Energy $ 552

1 First mortgage bonds were repaid the first business day following the maturity date, which did not fall on a business day.

CMS Energy’s Purchase of Consumers’ First Mortgage Bonds:

CMS Energy purchased Consumers’ first mortgage bonds with a principal balance of $ 404 million during 2024 in exchange for cash of $ 289 million.

On a consolidated basis, CMS Energy’s repurchase of Consumers’ first mortgage bonds was accounted for as a debt extinguishment and resulted in a pre-tax gain of $ 110 million for the year ended December 31, 2024, which was recorded in other income on CMS Energy’s consolidated statements of income.

Interest expense related to the repurchased bonds was $ 19 million for the year ended December 31, 2024.

In 2023, CMS Energy purchased Consumers’ first mortgage bonds with a principal balance of $ 431 million in exchange for cash of $ 293 million.

On a consolidated basis, CMS Energy’s repurchase of Consumers’ first mortgage bonds resulted in a pre-tax gain of $ 131 million for the year ended

December 31, 2023.

Interest expense related to the repurchased bonds was $ 5 million for the year ended December 31, 2023.

Regulatory Authorization for Financings:

Consumers is required to maintain FERC authorization for financings.

Its current authorization ends on March 31, 2025.

Any long-term issuances during the authorization period are exempt from FERC’s competitive bidding and negotiated placement requirements.

Its current authorization ends on May 2, 2026.

In January 2025, Consumers filed an application with the FERC for authority to issue long-term debt securities between February 21, 2025 and February 20, 2027.

The application does not seek to replace Consumers’ existing authority for short-term securities.

First Mortgage Bonds:

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CMS Energy, parent only $ 740 $ 300 $ 625 $ 800 $ —

NorthStar Clean Energy — — 150 — —

452 237 263 843 1,256

1 unchanged sentence

$ 1,192 $ 537 $ 1,038 $ 1,643 $ 1,256

NorthStar Clean Energy, including subsidiaries

Long-term debt $ — $ — $ 150 $ — $ —

Long-term debt $ 452 $ 237 $ 263 $ 843 $ 1,256

Credit Facilities:

6 unchanged sentences

NorthStar Clean Energy, including subsidiaries

September 25, 2025 2

May 7, 2027 2

$ 150 $ 150 $ — $ —

September 25, 2025 3

December 14, 2027

2 unchanged sentences

1 There were no borrowings under this facility during the year ended December 31, 2024 .

2 Obligations under this facility are secured by certain pledged equity interests in subsidiaries of NorthStar Clean Energy;

under the terms of this facility, the interests may not be sold by NorthStar Clean Energy unless there is an agreed-upon substitution for the pledged equity interests.

At December 31, 2024, the net book value of the pledged equity interests was $ 396 million.

Also under the terms of this facility, NorthStar Clean Energy may be restricted from remitting cash dividends to CMS Energy in the event of default.

3 This letter of credit facility is available to Aviator Wind Equity Holdings.

6 unchanged sentences

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, 2023, there were $ 93 million of commercial paper notes outstanding under this program with a weighted-average annual interest rate of 5.609 percent, recorded as current notes payable on the consolidated balance sheets of CMS Energy and Consumers.

At December 31, 2024, there were $ 65 million of commercial paper notes outstanding under this program bearing a weighted-average interest rate of 4.675 percent, recorded as current notes payable on CMS Energy’s and Consumers’ consolidated balance sheets.

In December 2024, Consumers renewed a short-term credit agreement with CMS Energy, permitting Consumers to borrow up to $ 500 million at an interest rate of the prior month’s average one ‑ month Term SOFR minus 0.100 percent.

At December 31, 2024, there were no outstanding borrowings under the agreement.

Consumers’ Supplier Financing Program:

Under a supplier financing program, Consumers agrees to pay a bank, acting as its payment agent, the stated amount of confirmed invoices from participating suppliers on the original maturity dates of the invoices.

The supplier invoices that have been confirmed as valid under the program require payment in full within 60 days of the invoice date.

Consumers does not provide collateral or a guarantee to the bank in support of its payment obligations under the agreement, nor does it pay a fee for the service.

Consumers or the bank may terminate the supplier financing program agreement upon 30 days prior written notice to the other party.

There were no trade payables outstanding under the program in accounts payable on CMS Energy’s and Consumers’ consolidated balance sheets at December 31, 2023, and less than $ 1 million at December 31, 2022.

NorthStar Clean Energy’s Supplier Financing Program :

Under a supplier financing program, NorthStar Clean Energy agrees to pay a bank that is acting as its payment agent the stated amount of confirmed invoices from participating suppliers on the original maturity dates of the invoices.

The bank is required to pay the supplier invoices that have been confirmed as valid under the program in full within 135 days of the invoice date.

NorthStar Clean Energy does not provide collateral or a guarantee to the bank in support of its payment obligations under the agreement, nor does it pay a fee for the service.

NorthStar Clean Energy or the bank may terminate the supplier financing program agreement upon

30 days prior written notice to the other party.

Obligations under this program are accounted for in accounts payable on CMS Energy’s consolidated balance sheets.

Presented in the following table is the activity under NorthStar Clean Energy’s supplier financing program during the year ended December 31, 2024:

Year Ended December 31 2024

Balance of payables under suppler financing program at beginning of period $ —

Payables confirmed 22

Balance of payables under suppler financing program at end of period $ 22

Dividend Restrictions:

11 unchanged sentences

In 2023, 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 $ 1 billion in privately negotiated transactions, in “at the market” offerings, or through forward sales transactions.

There have been no sales of securities under this program.

In November 2023, CMS Energy partially settled a forward contract, issued under its previous equity offering program, by issuing shares of its common stock at a weighted-average price of $ 68.05 per share, resulting in net proceeds of $ 178 million.

Presented in the following table are details of CMS Energy’s forward sales contracts under its equity offering program at December 31, 2023:

In January 2024, CMS Energy settled the remaining forward sale contracts issued under its previous equity offering program by issuing shares at a weighted average price of $ 70.31 per share, resulting in net proceeds of $ 266 million.

Presented in the following table are details of CMS Energy’s forward sales contracts under its current equity offering program at December 31, 2024:

Forward Price Per Share

Contract Date Maturity Date Number of Shares Initial December 31, 2024

August 3, 2022 December 31, 2024 328,207 $ 67.59 $ 68.37

August 24, 2022 December 31, 2024 1,677,938 69.46 70.91

August 29, 2022 December 31, 2024 1,783,388 68.18 69.54

December 16, 2024 November 27, 2025 400,581 $ 69.43 $ 69.53

Under these contracts, CMS Energy may either settle physically by issuing shares of its common stock at the then-applicable forward sale price specified by the agreement or settle net by delivering or receiving

3 unchanged sentences

No amounts are recorded on CMS Energy’s consolidated balance sheets until settlements of the forward equity sale contracts occur.

If CMS Energy had elected to net share settle or net cash settle the contracts as of December 31, 2023, CMS Energy would not have been required to deliver shares or pay cash.

In January 2024, CMS Energy settled the remaining forward sale contracts issued under its previous equity offering program by issuing shares at a weighted average price of $ 70.31 p er share, resulting in net proceeds o f $ 266 million.

If CMS Energy had elected to net share settle or net cash settle the contracts as of December 31, 2024, it would not have been required to deliver shares or pay cash.

Preferred Stock:

39 unchanged sentences

Nonqualified Deferred Compensation Plan Assets and Liabilities:

The nonqualified deferred compensation plan assets consist of mutual funds, which are bought and sold only at the discretion of plan participants.The assets are valued using the daily quoted net asset values.

The nonqualified deferred compensation plan assets consist of mutual funds, which are bought and sold only at the discretion of plan participants.

The assets are valued using the daily quoted net asset values.

CMS Energy and Consumers value their nonqualified deferred compensation plan liabilities based on the fair values of the plan assets, as they reflect the amount owed to the plan participants in accordance with their investment elections.

3 unchanged sentences

CMS Energy’s and Consumers’ derivatives are classified as Level 3.

CMS Energy and Consumers report derivatives in other non‑current assets on their consolidated balance sheets.

The majority of derivatives classified as Level 3 are FTRs held by Consumers.

Due to the lack of quoted pricing information, Consumers determines the fair value of its FTRs based on Consumers’ average historical settlements.

There was no material activity within the Level 3 categories of assets and liabilities during the periods presented.

There was no material activity within the Level 3 category of derivatives during the periods presented .

Financial Instruments

19 unchanged sentences

Long-term debt – related party 6

823 549 — 549 — 424 303 — 303 —

Long-term payables 4 4 — — 4 5 5 — — 5

1 Includes current portion of long-term accounts receivable and notes receivable of $ 4 million at December 31, 2024 and $ 6 million at December 31, 2023.

2 Includes current portion of long-term debt of $ 975 million at December 31, 2023 and $ 1,090 million at December 31, 2022.

3 Includes current portion of long-term payables of $ 2 million at December 31, 2022.

2 Includes current portion of long-term debt of $ 1.2 billion at December 31, 2024 and $ 975 million at December 31, 2023.

3 Includes current portion of long-term payables of $ 2 million at December 31, 2024 and December 31, 2023.

4 Includes current portion of notes receivable – related party of $ 7 million at December 31, 2024 and 2023.

For more information on notes receivable – related party, see Note 17, Related-party Transactions—Consumers .

5 Includes current portion of long-term debt of $ 452 million at December 31, 2024 and $ 725 million at December 31, 2023.

6 For more information on CMS Energy’s repurchases of Consumers’ first mortgage bonds, see Note 4, Financings and Capitalization—CMS Energy’s Purchase of Consumers’ First Mortgage Bonds .

Notes receivable – related party represents Consumers’ portion of the DB SERP demand note payable issued by CMS Energy to the DB SERP rabbi trust.

2 unchanged sentences

Presented in the following table are details of CMS Energy’s and Consumers’ plant, property, and equipment:

In Millions, Except as Noted

December 31 Estimated

32 unchanged sentences

3 Consumers’ plant additions were $ 2.1 billion for the year ended December 31, 2024 and $ 3.1 billion for the year ended December 31, 2023.

Consumers’ plant retirements, which include the impact of transfers to held for sale, were $ 856 million for the year ended December 31, 2023 and $ 290 million for the year ended December 31, 2022.

Consumers plans to retire the J.H.

Campbell coal-fueled generating units in 2025.

Accordingly, in 2022, Consumers removed from total plant, property, and equipment an amount of $ 1.3 billion, representing the projected remaining book value of the electric generating units upon their retirement, and recorded it as a regulatory asset.

For additional details, see Note 2, Regulatory Matters.

Consumers’ plant retirements were $ 390 million for the year ended December 31, 2024 and $ 856 million for the year ended December 31, 2023.

4 Underground storage includes base natural gas of $ 26 million at December 31, 2024 and 2023.

Base natural gas is not subject to depreciation.

Asset Acquisition:

In May 2023, Consumers purchased the Covert Generating Station, a natural gas-fueled generating facility with 1,200 MW of nameplate capacity in Van Buren County, Michigan for $ 810 million.

In August 2023, Consumers paid an additional $ 2 million as a result of a post-closing adjustment required under the purchase agreement.

Consumers accounted for the purchase as an asset acquisition, allocating the purchase price to the assets acquired and liabilities assumed based on their relative fair value.

The original cost of the plant was $ 665 million and the seller had recognized $ 225 million of accumulated depreciation.

Upon acquisition, Consumers recorded the net book value of $ 440 million and a plant acquisition adjustment of $ 370 million, resulting in an increase to plant, property, and equipment of $ 810 million.

The remainder of the purchase price was allocated among various working capital accounts.

Intangible Assets:

1 unchanged sentence

Presented in the following table are details about Consumers’ intangible assets:

In Millions, Except as Noted

Description Amortization Life in Years December 31, 2024 December 31, 2023

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Consumers records the offsetting credit as a reduction of interest for the amount representing the borrowed funds component and as other income for the equity funds component on the consolidated statements of income.

When construction is completed and the property is placed in service, Consumers depreciates and recovers the capitalized AFUDC from customers over the life of the related asset.

When construction is completed and the property is placed in service, Consumers

depreciates and recovers the capitalized AFUDC from customers over the life of the related asset.

Presented in the following table are Consumers’ average AFUDC capitalization rates:

15 unchanged sentences

Assets under finance leases are presented as gross amounts.

CMS Energy and Consumers’ accumulated amortization of assets under finance leases was $ 64 million at December 31, 2023 and $ 88 million at December 31, 2022.

CMS Energy’s, including Consumers’, accumulated amortization of assets under finance leases was $ 57 million at December 31, 2024 and $ 65 million at December 31, 2023.

Consumers’ accumulated amortization of assets under finance leases was $ 55 million at December 31, 2024 and $ 64 million at December 31, 2023.

Depreciation and Amortization:

6 unchanged sentences

Non-utility plant assets 3 6

Consumers depreciates utility property on an asset-group basis, in which it applies a single MPSC-approved depreciation rate to the gross investment in a particular class of property within the electric and gas segments.

gas segments.

Consumers performs depreciation studies periodically to determine appropriate group lives.

13 unchanged sentences

Other intangible assets 5 5 5

Other regulatory assets 2 — —

Securitized regulatory assets 111 33 28

4 unchanged sentences

Other intangible assets 5 5 5

Other regulatory assets 2 — —

Securitized regulatory assets 111 33 28

18 unchanged sentences

For additional details, see Note 2, Regulatory Matters.

Consumers is engaged in ongoing litigation with Wolverine Power related to Consumers’ authority to decide to retire the J.H.

Campbell 3 coal-fueled generating unit under the unit’s Joint Ownership and Operating Agreement.

For additional details on this dispute, see Note 3, Contingencies and Commitments—J.H.

Campbell 3 Plant Retirement Contract Dispute.

Consumers and DTE Electric are engaged in ongoing litigation with TAES and Toshiba related to the 2010 engineering, procurement, and construction agreement with TAES, under which TAES contracted to perform a major overhaul and upgrade of Ludington.

Consumers and DTE Electric are engaged in ongoing litigation with TAES and Toshiba related to TAES’ incomplete, defective, and nonconforming work during a major overhaul and upgrade of Ludington.

For additional details on this dispute, see Note 3, Contingencies and Commitments—Ludington Overhaul Contract Dispute.

7 unchanged sentences

Most of Consumers’ PPAs contain provisions at the end of the initial contract terms to renew the agreements annually under mutually agreed‑upon terms at the time of renewal.

Energy and capacity payments that vary depending on quantities delivered are recognized as variable lease costs when incurred.

Energy and capacity

payments that vary depending on quantities delivered are recognized as variable lease costs when incurred.

Consumers accounts for a PPA with one of CMS Energy’s equity method subsidiaries as a finance lease.

64 unchanged sentences

Finance Leases

December 31, 2023 Operating Leases Pipelines and PPAs Other Total

December 31, 2024 Operating Leases Pipelines and PPAs Land and Other Total

CMS Energy, including Consumers

33 unchanged sentences

If a reasonable estimate of fair value cannot be made in the period in which the ARO is incurred, such as for assets with indeterminate lives, the liability is recognized when a reasonable estimate of fair value can be made.

CMS Energy and Consumers have not recorded liabilities associated with the closure of certain gas wells that have an indeterminate life.

CMS Energy and Consumers have not recorded liabilities for assets that have immaterial cumulative disposal costs, such as substation batteries.

CMS Energy and Consumers have not recorded liabilities associated with the closure of their hydroelectric facilities and certain gas wells that have an indeterminate life or for assets that have immaterial cumulative disposal costs, such as substation batteries.

CMS Energy and Consumers calculate the fair value of ARO liabilities using an expected present-value technique that reflects assumptions about costs and inflation, and uses a credit-adjusted risk-free rate to discount the expected cash flows.

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Total Consumers $ 739 $ 1 $ ( 69 ) $ 33 $ ( 10 ) $ 694

Company and ARO Description ARO Liability 12/31/2021 Incurred Settled Accretion Cash Flow Revisions 1

ARO Liability 12/31/2022

In May 2024, the EPA finalized a rule regulating CCR impoundments at electric generating facilities that became inactive prior to the effective date of a rule published in 2015 regulating CCRs under RCRA.

Additionally, the EPA established groundwater monitoring, corrective action, closure, and post-closure care requirements for CCR surface impoundments and landfills closed prior to the effective date of the 2015 CCR rule, but that do not meet the closure technical and performance standards of the May 2024 rule.

These include inactive CCR landfills that were previously exempted from regulation but that are now considered CCR management units.

In response to the new rule, Consumers recorded an immaterial increase to its existing ARO and is performing a review of legacy impoundments and of other parts of the 2024 rule.

If needed, Consumers will record an incremental ARO for legacy impoundments when a reasonable estimate of the fair value of the associated costs can be made;

any resulting ARO could be material.

Consumers has historically been authorized to recover in electric rates costs related to coal ash disposal sites.

Company and ARO Description ARO Liability 12/31/2022 Incurred Settled Accretion Cash Flow Revisions ARO Liability 12/31/2023

CMS Energy, including Consumers

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Total Consumers $ 722 $ 4 $ ( 28 ) $ 32 $ 9 $ 739

1 Increase was attributable to a proposed change for closure work at the J.H.

Campbell 3 ash disposal landfill and an updated cost estimate for other coal ash disposal areas.

Retirement Benefits

Benefit Plans:

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

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

These plans include:

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The DB SERP is a nonqualified plan as defined by the Internal Revenue Code.

DB SERP benefits are paid from a rabbi trust established in 1988.

DB SERP benefits are paid from a rabbi trust.

The trust assets are not considered plan assets under ASC 715.

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DC SERP assets are included in other non‑current assets on CMS Energy’s and Consumers’ consolidated balance sheets.

CMS Energy’s and Consumers’ DC SERP expense was $ 1 million for the years ended December 31, 2023 and 2022, and $ 2 million for the year ended December 31, 2021.

CMS Energy’s and Consumers’ DC SERP expense was $ 1 million for the years ended December 31, 2024, 2023, and 2022.

The 401(k) plan employer match equals four to six percent of employee eligible contributions based on an employee’s wages and class.

The total 401(k) plan cost for CMS Energy, including Consumers, was $ 41 million for the year ended December 31, 2023, $ 44 million for the year ended December 31, 2022, and $ 31 million for the year ended December 31, 2021.

The total 401(k) plan cost for CMS Energy, including Consumers, was $ 41 million for the years ended December 31, 2024 and 2023, and $ 44 million for the year ended December 31, 2022.

The total 401(k) plan cost for Consumers was $ 39 million for the year ended December 31, 2024, $ 40 million for the year ended December 31, 2023, and $ 43 million for the year ended December 31, 2022.

Participants in the OPEB Plan include all regular full-time employees covered by the employee health care plan on the day before retirement from either CMS Energy or Consumers at age 55 or older with at least 10 full years of applicable continuous service.

Health-related OPEB Plan:

Participants in the health-related OPEB Plan include regular full-time employees covered by the employee health care plan on the day before retirement from either CMS Energy or Consumers at age 55 or older with at least 10 full years of applicable continuous service and hired before January 1, 2007 for non-union participants and hired before September 1, 2010 for union participants.

Regular full-time employees who qualify for disability retirement under the DB Pension Plans or are disabled and covered by the DCCP and who have 15 years of applicable continuous service may also participate in the OPEB Plan.

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DB Pension Plan A 5.08 % 5.27 % 3.09 %

DB SERP 5.18 3.09 2.84

OPEB Plan 5.12 5.31 3.23

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DB Pension Plan A 3.60 3.60 3.60

DB SERP 5.50 5.50 5.50

1 The mortality assumption for benefit obligations was based on the Pri-2012 Mortality Table, with improvement scale MP-2021.

The mortality assumption for net periodic benefit cost was based on the Pri-2012 Mortality Table, with improvement scale MP-2021 for 2023 and 2022 and improvement scale MP-2020 for 2021.

The mortality assumption for net periodic benefit cost was based on the Pri-2012 Mortality Table, with improvement scale MP-2021.

2 The discount rate reflects the rate at which benefits could be effectively settled and is equal to the equivalent single rate resulting from a yield-curve analysis.

This analysis incorporated the projected benefit payments specific to CMS Energy’s and Consumers’ DB Pension Plans and OPEB Plan and the yields on high-quality corporate bonds rated Aa or better.

3 The DB SERP no longer requires rate of compensation increase as the last active participant retired in 2023.

3 The last active participant in the DB SERP retired in 2023.

Thus, the determination of the associated benefit obligation and net periodic benefit cost no longer assumes a rate of compensation increase nor a service cost discount rate.

4 CMS Energy and Consumers have elected to use a full-yield-curve approach in the estimation of service cost and interest cost;

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CMS Energy, including Consumers

Net periodic cost (credit)

Net periodic credit

Service cost $ 28 $ 29 $ 41 $ 11 $ 12 $ 17

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Settlement loss 11 11 9 — — —

Net periodic cost (credit) $ ( 52 ) $ ( 27 ) $ 19 $ ( 76 ) $ ( 120 ) $ ( 113 )

Net periodic credit $ ( 70 ) $ ( 52 ) $ ( 27 ) $ ( 88 ) $ ( 76 ) $ ( 120 )

Net periodic credit

Service cost $ 27 $ 28 $ 39 $ 11 $ 11 $ 17

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Net periodic credit $ ( 66 ) $ ( 49 ) $ ( 26 ) $ ( 81 ) $ ( 70 ) $ ( 113 )

In Consumers’ 2022 electric and gas rate cases, the MPSC approved a mechanism allowing Consumers to defer the future recovery or refund of pension and OPEB expenses above or below the amounts used to set existing rates, respectively, beginning in January 2023 for the electric utility and October 2023 for the gas utility.

At December 31, 2023, CMS Energy, including Consumers, had deferred $ 11 million of pension credits and $ 23 million of OPEB costs under this mechanism.

CMS Energy and Consumers amortize net gains and losses in excess of ten percent of the greater of the PBO or the MRV over the average remaining service period for DB Pension Plan A and the OPEB Plan and over the average remaining life expectancy of participants for DB Pension Plan B.

For DB Pension Plan A, the estimated period of amortization of gains and losses was eight years for the years ended

December 31, 2023, 2022, and 2021.

For DB Pension Plan B, the estimated period of amortization of gains and losses was 17 years for the year ended December 31, 2023, and 18 years for the years ended December 31, 2022 and 2021.

In Consumers’ electric and gas rate cases, the MPSC approved a mechanism allowing Consumers to defer for future recovery or refund pension and OPEB expenses above or below the amounts used to set existing rates.

Amounts deferred will be collected from or refunded to customers over ten years.

At December 31, 2024, CMS Energy, including Consumers, had deferred $ 15 million of pension credits and $ 11 million of OPEB credits under this mechanism related to 2024 expense.

At December 31, 2023, CMS Energy, including Consumers, had deferred $ 11 million of pension credits and $ 23 million of OPEB costs under this mechanism related to 2023 expense.

CMS Energy and Consumers amortize net gains and losses in excess of ten percent of the greater of the PBO or the MRV over the average remaining service period for DB Pension Plan A and the OPEB Plan

and over the average remaining life expectancy of participants for DB Pension Plan B.

For DB Pension Plan A, the estimated period of amortization of gains and losses was eight years for the years ended December 31, 2024, 2023, and 2022.

For DB Pension Plan B, the estimated period of amortization of gains and losses was 17 years for the years ended December 31, 2024 and 2023, and 18 years for the year ended December 31, 2022.

For the OPEB Plan, the estimated amortization period was nine years for the years ended December 31, 2024, 2023, and 2022.

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CMS Energy and Consumers had new prior service costs for OPEB in 2024.

The estimated period of amortization of these new prior service costs is eight years .

The estimated period of amortization of these new prior service costs is seven years .

CMS Energy and Consumers determine the MRV for the assets of the DB Pension Plans as the fair value of plan assets on the measurement date, adjusted by the gains or losses that will not be admitted into the MRV until future years.

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Actuarial loss (gain) ( 91 ) 1

( 4 ) 1 ( 40 ) 1

Benefits paid ( 142 ) ( 161 ) ( 10 ) ( 10 ) ( 58 ) ( 54 )

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Funded status $ ( 76 ) $ ( 83 ) $ 678 $ 586

1 The actuarial gains for 2024 for the DB Pension Plans and OPEB Plans were primarily the result of higher discount rates.

The actuarial losses for 2023 for the DB Pension Plans and OPEB Plan were primarily the result of lower discount rates.

The actuarial gains for 2022 for the DB Pension Plans and OPEB Plan were primarily the result of higher discount rates.

2 The total funded status of the DB Pension Plans attributable to Consumers, based on an allocation of expenses, was $ 836 million at December 31, 2024 and $ 781 million at December 31, 2023.

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DB SERP 69 76

The ABO for the DB Pension Plans was $ 2.0 billion at December 31, 2023 and 2022.

The ABO for the DB Pension Plans was $ 1.9 billion at December 31, 2024 and $ 2.0 billion at December 31, 2023.

At December 31, 2024 and 2023, the PBO and ABO did not exceed plan assets for any of the defined benefit pension plans.

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December 31, 2024 December 31, 2023

Total Level 1 Level 2 Total Level 1

Total Level 1 Level 2 Total Level 1 Level 2

CMS Energy, including Consumers

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December 31, 2024 December 31, 2023

Total Level 1 Level 2 Total Level 1

Total Level 1 Level 2 Total Level 1 Level 2

CMS Energy, including Consumers

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State and municipal bonds 2 — 2 1 — 1

Foreign corporate bonds 15 — 15 — —

Foreign bonds 15 — 15 15 — 15

Common stocks 170 170 — 161 161 —

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The fair value of the bonds is derived from various observable inputs, including benchmark yields, reported securities trades, broker/dealer quotes, bond ratings, and general information on market movements for investment grade state and municipal securities normally considered by market participants when pricing such debt securities.

Foreign Corporate Bonds:

Foreign corporate debt securities are valued based on quoted market prices, when available, or on yields available on comparable securities of issuers with similar credit ratings.

Foreign Bonds:

Foreign corporate and government debt securities are valued based on quoted market prices, when available, or on yields available on comparable securities of issuers with similar credit ratings.

Common Stocks:

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( 43 ) ( 40 ) ( 65 )

Deferred tax adjustment 2

Taxes attributable to noncontrolling interests 12 17 5

Accelerated flow-through of regulatory tax benefits 3

— ( 39 ) ( 28 )

Other, net ( 1 ) ( 3 ) 3

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( 43 ) ( 40 ) ( 65 )

Deferred tax adjustment 2

Accelerated flow-through of regulatory tax benefits 3

— ( 39 ) ( 28 )

Other, net — ( 5 ) 3

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Effective tax rate 16.5 % 15.7 % 12.9 %

1 CMS Energy initiated a plan to divest immaterial business activities in a non ‑ Michigan jurisdiction and will no longer have a taxable presence within that jurisdiction after 2023.

As a result of these actions, CMS Energy reversed a $ 13 million non ‑ Michigan reserve, all of which was recognized at Consumers.

2 In 2020, the MPSC authorized Consumers to accelerate the amortization of the gas portion of its regulatory liability associated with unprotected, non-property-related excess deferred income taxes resulting from the TCJA.

This portion of the regulatory liability was fully amortized in 2022.

1 CMS Energy initiated a plan to divest immaterial business activities in a non‑Michigan jurisdiction and will no longer have a taxable presence within that jurisdiction.

As a result of these actions, during 2023, CMS Energy reversed a $ 13 million non‑Michigan reserve, all of which was recognized at Consumers.

2 During 2024, Consumers recognized a $ 16 million tax benefit resulting from the expiration of the statute of limitations associated with audit points for the 2018 and 2019 tax years.

3 In 2020, the MPSC authorized Consumers to accelerate the amortization of income tax benefits associated with the cost to remove gas plant assets.

These tax benefits were fully amortized in 2022.

Renewable Energy Tax Credits:

Under the Inflation Reduction Act of 2022, renewable energy tax credits produced after 2022 are eligible to be transferred to third parties.

These sales are accounted for under ASC 740 with the discount from the sale of the tax credits included as a component of income tax expense.

Renewable energy tax credits that have been generated and sold are presented as accounts receivable on CMS Energy’s and Consumers’ consolidated balance sheets until proceeds from the sale are received.

Proceeds from the sale of tax credits are presented as operating activities on their consolidated statements of cash flows, consistent with the presentation of cash taxes paid.

During 2024, CMS Energy sold renewable energy tax credits generated in 2023 and received proceeds of $ 37 million, all of which was recognized at Consumers.

CMS Energy also sold renewable energy tax credits generated in 2024, receiving proceeds of $ 59 million in 2024, of which $ 39 million was recognized at Consumers.

CMS Energy will receive an additional $ 13 million in 2025, all of which will be recognized at Consumers.

Presented in the following table are the significant components of income tax expense on continuing operations:

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CMS Energy, including Consumers

State net operating loss carryforwards $ 69 2030 – 2033

Michigan net operating loss carryforwards $ 38 2030 – 2033

Arkansas net operating loss carryforwards 2 2033 - 2034

Local net operating loss carryforwards 2 2025 – 2040

General business credits 1

216 2038 – 2044

Total tax attributes $ 258

State net operating loss carryforwards $ 53 2030 – 2033

Michigan net operating loss carryforwards $ 29 2030 – 2033

General business credits 1

8 2038 – 2044

Total tax attributes $ 37

1 General business credits comprise research and development tax credits and renewable energy tax credits that are not expected to be transferred to third parties.

CMS Energy has provided a valuation allowance of $ 1 million for the local tax loss carryforward.

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Reductions for prior-year tax positions — — ( 1 )

Reductions for lapse of statute of limitations ( 5 ) ( 3 ) —

Balance at end of period $ 24 $ 26 $ 28

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Reductions for prior-year tax positions — — ( 2 )

Reductions for lapse of statute of limitations ( 11 ) ( 3 ) —

Balance at end of period $ 32 $ 36 $ 36

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CMS Energy and Consumers recognize accrued interest and penalties, where applicable, as part of income tax expense.

CMS Energy, including Consumers, recognized no interest or penalties for each of the years ended December 31, 2023, 2022, or 2021.

CMS Energy, including Consumers, recognized immaterial interest and penalties for each of the years ended December 31, 2024, 2023, and 2022.

The amount of income taxes paid is subject to ongoing audits by federal, state, local, and foreign tax authorities, which can result in proposed assessments.

CMS Energy’s federal income tax returns for 2020

and subsequent years remain subject to examination by the IRS.

CMS Energy’s federal income tax returns for 2021 and subsequent years remain subject to examination by the IRS.

CMS Energy’s Michigan Corporate Income Tax returns for 2013 ‑ 2016 and 2020 and subsequent years remain subject to examination by the State of Michigan.

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While the forward sale price in the forward equity sale contract is decreased on certain dates by certain predetermined amounts to reflect expected dividend payments, these price adjustments were set upon inception of the agreement and the forward contract does not give the owner the right to participate in undistributed earnings.

Accordingly, the forward equity sale contracts were

included in the computation of diluted EPS, but not in the computation of basic EPS.

Accordingly, the forward equity sale contracts were included in the computation of diluted EPS, but not in the computation of basic EPS.

The potentially dilutive impact from these forward equity sale contracts is reflected in diluted EPS using the treasury stock method.

There will be a dilutive effect on EPS when the average market price of common stock shares is above the applicable adjusted forward sale price.

Additionally, any physical settlement or net share settlement of the agreements would dilute EPS.

The forward equity sale contracts were anti-dilutive for the year ended December 31, 2024.

For further details on the forward equity sale contracts, see Note 4, Financings and Capitalization.

Convertible Securities

In May 2023, CMS Energy issued an aggregate principal amount of $ 800 million convertible senior notes.

In May 2023, CMS Energy issued convertible senior notes.

Potentially dilutive common shares issuable upon conversion of the convertible senior notes are determined using the if-converted method for calculating diluted EPS.

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The convertible senior notes were anti-dilutive for the year ended December 31, 2024.

For further details on CMS Energy’s convertible senior notes, see Note 4, Financings and Capitalization.

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

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Consumers alternative-revenue programs 49 20 — 69

Consumers revenues to be refunded ( 29 ) ( 8 ) — ( 37 )

Total operating revenue – CMS Energy $ 4,745 $ 2,420 $ 297 $ 7,462

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Alternative-revenue programs 49 20 69

Revenues to be refunded ( 29 ) ( 8 ) ( 37 )

Other non-segment revenue — — 1

Total operating revenue – Consumers $ 4,745 $ 2,420 $ 7,166

8 unchanged sentences

Consumers alternative-revenue programs 43 14 — 57

Consumers revenues to be refunded ( 29 ) ( 8 ) — ( 37 )

Total operating revenue – CMS Energy $ 5,419 $ 2,732 $ 445 $ 8,596

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Alternative-revenue programs 43 14 57

Revenues to be refunded ( 29 ) ( 8 ) ( 37 )

Total operating revenue – Consumers $ 5,419 $ 2,732 $ 8,151

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These arrangements generally do not have fixed terms and remain in effect as long as the customer consumes the utility service.

The rates are set by the MPSC through the rate-making process and represent the stand-alone selling price of a bundled product comprising the commodity, electricity or natural gas, and the service of delivering such commodity.

The rates are set by the MPSC through the rate-making process and represent the stand-alone selling price of a bundled

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

In some instances, Consumers has specific fixed-term contracts with large commercial and industrial customers to provide electricity or gas at certain tariff rates or to provide gas transportation services at contracted rates.

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Accordingly, Consumers recognizes revenues at the tariff or contracted rate as electricity or gas is delivered to the customer.

Consumers also has other miscellaneous contracts with customers related to pole and other property rentals, appliance service plans, and utility contract work.

Consumers also has other miscellaneous contracts with customers related to pole and other property rentals and utility contract work.

Generally, these contracts are short term or evergreen in nature.

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Alternative ‑ revenue Programs:

Consumers accounts for its energy waste reduction incentive mechanism and financial compensation mechanism as alternative-revenue programs.

Consumers recognizes revenue related to the energy waste reduction incentive as soon as energy savings exceed the annual targets established by the MPSC and recognizes revenue related to the financial compensation mechanism as payments are made on MPSC-approved PPAs.

Consumers accounts for its energy waste reduction incentive mechanism, financial compensation mechanism, and demand response incentive mechanism as alternative-revenue programs.

Consumers recognizes revenue related to the energy waste reduction incentive as soon as energy savings exceed the annual targets established by the MPSC.

Revenue related to the financial compensation mechanism is recognized as payments are made on MPSC-approved PPAs.

Under a demand response incentive mechanism, Consumers earns a financial incentive when it meets demand response targets set by the MPSC.

Consumers recognizes revenue related to this program once demand response incentive objectives are complete, the incentive amount is calculable, and the incentive revenue will be collected within a 24 ‑ month period.

For additional information on these mechanisms, see Note 2, Regulatory Matters.

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Revenues to Be Refunded:

In December 2022, the MPSC issued an order authorizing Consumers to refund $ 22 million voluntarily to utility customers.

Additionally, in the settlement of its 2022 electric rate case, Consumers agreed to refund voluntarily $ 15 million of 2022 revenues to utility customers through a one ‑ time bill credit.

For additional information, see Note 2, Regulatory Matters.

In 2022, the MPSC issued an order authorizing Consumers to refund $ 22 million voluntarily to utility customers.

Additionally, in the settlement of its 2022 electric rate case,

Consumers agreed to refund voluntarily $ 15 million of 2022 revenues to utility customers through a one ‑ time bill credit.

Other Income and Other Expense

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Reportable segments consist of business units defined by the products and services they offer.

CMS Energy and Consumers evaluate the performance of each segment based on its contribution to net income available to CMS Energy’s common stockholders.

CMS Energy’s and Consumers’ chief operating decision-maker is the CEO.

The chief operating decision-maker evaluates segment performance and profitability using net income available to CMS Energy’s common stockholders.

This metric provides a clear, consistent basis for analyzing the financial results of each segment and supports decision-making regarding the allocation of resources.

Resource allocation to CMS Energy’s and Consumers’ segments begins with the annual budgeting process, which establishes initial funding and resource levels for each segment.

The budget incorporates key financial and operational inputs, including anticipated revenues, expenses, and capital requirements, aligning with CMS Energy’s and Consumers’ strategic objectives and regulatory obligations.

The chief operating decision-maker reviews budget-to-actual variances on a monthly basis and makes interim decisions to reallocate resources among segments as needed, ensuring a timely and effective response to changing conditions.

For the electric utility and gas utility segments, the chief operating decision-maker uses this assessment to determine whether the segments are achieving their regulatory authorized return on equity.

Accounting policies for CMS Energy’s and Consumers’ segments are as described in Note 1, Significant Accounting Policies.

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Presented in the following tables is financial information by segment:

Years Ended December 31 2023 2022 2021

Year Ended December 31, 2024 Electric Utility Gas Utility NorthStar Clean Energy Segments Total Other Reconciling Items Consolidated

CMS Energy, including Consumers

Operating revenue $ 5,061 $ 2,138 $ 316 $ 7,515 $ — $ 7,515

Electric utility $ 4,745 $ 5,419 $ 4,958

Gas utility 2,420 2,732 2,063

NorthStar Clean Energy 297 445 308

Total operating revenue – CMS Energy $ 7,462 $ 8,596 $ 7,329

Operating revenue

Electric utility $ 4,745 $ 5,419 $ 4,958

Gas utility 2,420 2,732 2,063

Other reconciling items 1 — —

Total operating revenue – Consumers $ 7,166 $ 8,151 $ 7,021

CMS Energy, including Consumers

Depreciation and amortization

Electric utility $ 797 $ 757 $ 772

Gas utility 338 330 304

NorthStar Clean Energy 43 38 37

Other reconciling items 2 1 1

Total depreciation and amortization – CMS Energy $ 1,180 $ 1,126 $ 1,114

Operating expenses

Power supply cost 1

1,867 — 161 2,028 — 2,028

Cost of gas sold — 637 3 640 — 640

Maintenance and other operating expenses 1,066 454 101 1,621 17 1,638

Depreciation and amortization 865 325 49 1,239 1 1,240

Electric utility $ 797 $ 757 $ 772

Gas utility 338 330 304

Other reconciling items 2 1 1

Total depreciation and amortization – Consumers $ 1,137 $ 1,088 $ 1,077

Years Ended December 31 2023 2022 2021

CMS Energy, including Consumers

Income from equity method investees 1

NorthStar Clean Energy $ 7 $ 3 $ 10

Total income from equity method investees – CMS Energy $ 7 $ 3 $ 10

CMS Energy, including Consumers

Interest charges

Electric utility $ 281 $ 218 $ 207

Gas utility 158 116 104

NorthStar Clean Energy 2 3 6

Other reconciling items 202 182 183

Total interest charges – CMS Energy $ 643 $ 519 $ 500

General taxes 281 188 12 481 1 482

Total operating expenses 4,079 1,604 326 6,009 19 6,028

Operating Income (Loss) 982 534 ( 10 ) 1,506 ( 19 ) 1,487

Other income 2

126 86 14 226 118 344

Interest charges 324 192 4 520 188 708

Electric utility $ 285 $ 218 $ 207

Gas utility 161 116 104

Other reconciling items 2 1 —

Total interest charges – Consumers $ 448 $ 335 $ 311

CMS Energy, including Consumers

Income tax expense (benefit)

Electric utility $ 67 $ 109 $ 117

Gas utility 98 32 39

NorthStar Clean Energy 4 3 ( 2 )

Other reconciling items ( 22 ) ( 51 ) ( 59 )

Total income tax expense – CMS Energy $ 147 $ 93 $ 95

Income (Loss) Before Income Taxes 784 428 — 1,212 ( 89 ) 1,123

Income tax expense (benefit) 102 99 ( 5 ) 196 ( 20 ) 176

Electric utility $ 67 $ 109 $ 117

Gas utility 98 32 39

Other reconciling items ( 4 ) ( 1 ) —

Total income tax expense – Consumers $ 161 $ 140 $ 156

Years Ended December 31 2023 2022 2021

CMS Energy, including Consumers

Income (Loss) From Continuing Operations 682 329 5 1,016 ( 69 ) 947

Other segment items 3

( 1 ) ( 1 ) 58 56 ( 10 ) 46

Net Income (Loss) Available to Common Stockholders $ 681 $ 328 $ 63 $ 1,072 $ ( 79 ) $ 993

Electric utility $ 550 $ 567 $ 565

Gas utility 315 378 302

NorthStar Clean Energy 67 34 23

Other reconciling items ( 55 ) ( 152 ) 458

Total net income available to common stockholders – CMS Energy $ 877 $ 827 $ 1,348

Property, plant, and equipment, gross $ 20,137 4

$ 1,506 $ 34,911 $ 21 $ 34,932

Investments in equity method investees — — 64 64 — 64

Total assets 20,710 4

1,893 35,850 70 35,920

Capital expenditures 5

288 3,300 1 3,301

1 Power supply costs comprise of fuel for electric generation, purchased and interchange power, and purchased power – related parties.

2 Includes income from equity method investees of $ 7 million attributable to NorthStar Clean Energy.

See Note 15, Other Income and Other Expense

3 Other segment items comprise of loss attributable to noncontrolling interests and preferred stock dividends.

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

5 Amounts include assets placed under finance lease.

6 Amounts include a portion of Consumers’ capital expenditures for plant and equipment attributable to both the electric and gas utility businesses.

Year Ended December 31, 2024 Electric Utility Gas Utility Segments Total Other Reconciling Items Consolidated

Operating revenue $ 5,061 $ 2,138 $ 7,199 $ 1 $ 7,200

Operating expenses

Power supply cost 1

1,867 — 1,867 — 1,867

Cost of gas sold — 637 637 — 637

Maintenance and other operating expenses 1,066 454 1,520 — 1,520

Depreciation and amortization 865 325 1,190 1 1,191

General taxes 281 188 469 1 470

Total operating expenses 4,079 1,604 5,683 2 5,685

Operating Income (Loss) 982 534 1,516 ( 1 ) 1,515

Other income 126 86 212 — 212

Interest charges 324 192 516 2 518

Income (Loss) Before Income Taxes 784 428 1,212 ( 3 ) 1,209

Income tax expense (benefit) 102 99 201 ( 1 ) 200

Net Income (Loss) 682 329 1,011 ( 2 ) 1,009

Other segment items 2

( 1 ) ( 1 ) ( 2 ) — ( 2 )

Net Income (Loss) Available to Common Stockholder $ 681 $ 328 $ 1,009 $ ( 2 ) $ 1,007

Electric utility $ 550 $ 567 $ 565

Gas utility 315 378 302

Other reconciling items — ( 2 ) ( 1 )

Total net income available to common stockholder – Consumers $ 865 $ 943 $ 866

Property, plant, and equipment, gross $ 20,137 3

$ 33,405 $ 29 $ 33,434

Total assets 20,767 3

34,056 32 34,088

Capital expenditures 4

3,012 — 3,012

1 Power supply costs comprise of fuel for electric generation, purchased and interchange power, and purchased power – related parties.

2 Other segment items comprise of preferred stock dividends.

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

4 Amounts include assets placed under finance lease.

5 Amounts include a portion of Consumers’ capital expenditures for plant and equipment attributable to both the electric and gas utility businesses.

Year Ended December 31, 2023 Electric Utility Gas Utility NorthStar Clean Energy Segments Total Other Reconciling Items Consolidated

CMS Energy, including Consumers

Plant, property, and equipment, gross

Electric utility 2

Operating revenue $ 4,745 $ 2,420 $ 297 $ 7,462 $ — $ 7,462

Operating expenses

Power supply cost 1

1,841 — 170 2,011 — 2,011

Gas utility 2

Cost of gas sold — 897 5 902 — 902

Maintenance and other operating expenses 1,075 511 88 1,674 13 1,687

Depreciation and amortization 797 338 43 1,178 2 1,180

General taxes 260 176 10 446 1 447

Total operating expenses 3,973 1,922 316 6,211 16 6,227

Operating Income (Loss) 772 498 ( 19 ) 1,251 ( 16 ) 1,235

Other income 2

131 77 12 220 142 362

NorthStar Clean Energy 1,420 1,148 1,122

Other reconciling items 30 30 23

Total plant, property, and equipment, gross – CMS Energy $ 33,135 $ 30,491 $ 29,893

Plant, property, and equipment, gross

Electric utility 2

Interest charges 285 161 2 448 195 643

Income (Loss) Before Income Taxes 618 414 ( 9 ) 1,023 ( 69 ) 954

Income tax expense (benefit) 67 98 4 169 ( 22 ) 147

Income (Loss) From Continuing Operations 551 316 ( 13 ) 854 ( 47 ) 807

Other segment items 3

( 1 ) ( 1 ) 80 78 ( 8 ) 70

Gas utility 2

Net Income (Loss) Available to Common Stockholders $ 550 $ 315 $ 67 $ 932 $ ( 55 ) $ 877

Property, plant, and equipment, gross $ 19,302 4

$ 1,420 $ 33,105 $ 30 $ 33,135

Other reconciling items 38 29 23

Total plant, property, and equipment, gross – Consumers $ 31,723 $ 29,342 $ 28,771

CMS Energy, including Consumers

Investments in equity method investees — — 74 74 — 74

NorthStar Clean Energy $ 76 $ 71 $ 71

Total investments in equity method investees – CMS Energy $ 76 $ 71 $ 71

Years Ended December 31 2023 2022 2021

CMS Energy, including Consumers

Electric utility 2

Total assets 19,358 4

1,604 33,315 202 33,517

Gas utility 2

Capital expenditures 5

156 $ 3,278 2 3,280

NorthStar Clean Energy 1,604 1,464 1,312

Other reconciling items 202 109 431

Total assets – CMS Energy $ 33,517 $ 31,353 $ 28,753

Electric utility 2

1 Power supply costs comprise of fuel for electric generation, purchased and interchange power, and purchased power – related parties.

2 Includes income from equity method investees of $ 7 million attributable to NorthStar Clean Energy.

See Note 15, Other Income and Other Expense.

3 Other segment items comprise of income from discontinued operations, net of tax, loss attributable to noncontrolling interests, and preferred stock dividends.

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

5 Amounts include assets placed under finance lease.

6 Amounts include a portion of Consumers’ capital expenditures for plant and equipment attributable to both the electric and gas utility businesses.

Year Ended December 31, 2023 Electric Utility Gas Utility Segments Total Other Reconciling Items Consolidated

Operating revenue $ 4,745 $ 2,420 $ 7,165 $ 1 $ 7,166

Operating expenses

Power supply cost 1

1,841 — 1,841 — 1,841

Gas utility 2

Cost of gas sold — 897 897 — 897

Maintenance and other operating expenses 1,075 511 1,586 — 1,586

Depreciation and amortization 797 338 1,135 2 1,137

General taxes 260 176 436 1 437

Total operating expenses 3,973 1,922 5,895 3 5,898

Operating Income (Loss) 772 498 1,270 ( 2 ) 1,268

Other income 131 77 208 — 208

Interest charges 285 161 446 2 448

Income (Loss) Before Income Taxes 618 414 1,032 ( 4 ) 1,028

Income tax expense (benefit) 67 98 165 ( 4 ) 161

Net Income 551 316 867 — 867

Other segment items 2

( 1 ) ( 1 ) ( 2 ) — ( 2 )

Other reconciling items 38 30 21

Total assets – Consumers $ 31,852 $ 29,916 $ 27,140

CMS Energy, including Consumers

Capital expenditures 3

Electric utility 4

Net Income Available to Common Stockholder $ 550 $ 315 $ 865 $ — $ 865

Property, plant, and equipment, gross $ 19,302 3

$ 31,685 $ 38 $ 31,723

Gas utility 4

Total assets 19,417 3

31,814 38 31,852

NorthStar Clean Energy 156 113 17

Other reconciling items 2 7 2

Total capital expenditures – CMS Energy $ 3,280 $ 2,393 $ 2,161

Capital expenditures 4

Electric utility 4

3,122 23 3,145

Gas utility 4

1,041 1,008 989

Other reconciling items 23 7 2

Total capital expenditures – Consumers $ 3,145 $ 2,280 $ 2,144

1 Consumers had no equity method investments.

1 Power supply costs comprise of fuel for electric generation, purchased and interchange power, and purchased power – related parties.

2 Other segment items comprise of preferred stock dividends.

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

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5 Amounts include a portion of Consumers’ capital expenditures for plant and equipment attributable to both the electric and gas utility businesses.

Year Ended December 31, 2022 Electric Utility Gas Utility NorthStar Clean Energy Segments Total Other Reconciling Items Consolidated

CMS Energy, including Consumers

Operating revenue $ 5,419 $ 2,732 $ 445 $ 8,596 $ — $ 8,596

Operating expenses

Power supply cost 1

2,605 — 304 2,909 — 2,909

Cost of gas sold — 1,243 13 1,256 — 1,256

Maintenance and other operating expenses 1,028 554 76 1,658 11 1,669

Depreciation and amortization 757 330 38 1,125 1 1,126

General taxes 240 159 12 411 1 412

Total operating expenses 4,630 2,286 443 7,359 13 7,372

Operating Income (Loss) 789 446 2 1,237 ( 13 ) 1,224

Other income (expense) 2

106 81 12 199 ( 2 ) 197

Interest charges 218 116 3 337 182 519

Income (Loss) Before Income Taxes 677 411 11 1,099 ( 197 ) 902

Income tax expense (benefit) 109 32 3 144 ( 51 ) 93

Income (Loss) From Continuing Operations 568 379 8 955 ( 146 ) 809

Other segment items 3

( 1 ) ( 1 ) 26 24 ( 6 ) 18

Net Income (Loss) Available to Common Stockholders $ 567 $ 378 $ 34 $ 979 $ ( 152 ) $ 827

1 Power supply costs comprise of fuel for electric generation, purchased and interchange power, and purchased power – related parties.

2 Includes income from equity method investees of $ 3 million attributable to NorthStar Clean Energy.

See Note 15, Other Income and Other Expense.

3 Other segment items comprise of income from discontinued operations, net of tax, loss attributable to noncontrolling interests, and preferred stock dividends.

Year Ended December 31, 2022 Electric Utility Gas Utility Segments Total Other Reconciling Items Consolidated

Operating revenue $ 5,419 $ 2,732 $ 8,151 $ — $ 8,151

Operating expenses

Power supply cost 1

2,605 — 2,605 — 2,605

Cost of gas sold — 1,243 1,243 — 1,243

Maintenance and other operating expenses 1,028 554 1,582 — 1,582

Depreciation and amortization 757 330 1,087 1 1,088

General taxes 240 159 399 1 400

Total operating expenses 4,630 2,286 6,916 2 6,918

Operating Income (Loss) 789 446 1,235 ( 2 ) 1,233

Other income 106 81 187 — 187

Interest charges 218 116 334 1 335

Income (Loss) Before Income Taxes 677 411 1,088 ( 3 ) 1,085

Income tax expense (benefit) 109 32 141 ( 1 ) 140

Net Income (Loss) 568 379 947 ( 2 ) 945

Other segment items 2

( 1 ) ( 1 ) ( 2 ) — ( 2 )

Net Income (Loss) Available to Common Stockholder $ 567 $ 378 $ 945 $ ( 2 ) $ 943

1 Power supply costs comprise of fuel for electric generation, purchased and interchange power, and purchased power – related parties.

2 Other segment items comprise of preferred stock dividends.

Related-party Transactions—Consumers

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The portion of the demand note attributable to Consumers was recorded as a note receivable – related party on Consumers’ consolidated balance sheets at December 31, 2024 and 2023.

For more information about Consumers’ note receivable – related party, see Note 6, Financial Instruments.

Consumers has a natural gas transportation agreement with a subsidiary of CMS Energy that extends through 2038, related to a pipeline owned by Consumers.

For additional details about the agreement, see Note 8, Leases.

During 2023, CMS Energy repurchased certain of Consumers’ first mortgage bonds.

CMS Energy has repurchased certain of Consumers’ first mortgage bonds.

Interest payable to related parties was $ 7 million at December 31, 2024 and $ 3 million at December 31, 2023.

For more information about these repurchases, see Note 4, Financings and Capitalization—CMS Energy’s Purchase of Consumers’ First Mortgage Bonds.

In November 2023, an unregulated subsidiary of Consumers sold certain non-utility renewable development projects to NorthStar Clean Energy for $ 20 million, the projects’ net book value;

there was no gain or loss recognized on this sale.

In December 2024, Consumers renewed a short-term credit agreement with CMS Energy, permitting Consumers to borrow up to $ 500 million.

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Consolidated VIEs:

During 2023, NorthStar Clean Energy sold a Class A membership interest in Newport Solar Holdings to tax equity investors for $ 86 million.

Newport Solar Holdings wholly owns Newport Solar, a 180 ‑MW solar generation project located in Jackson County, Arkansas;

the project began commercial operation in October 2023.

NorthStar Clean Energy holds a Class B membership interest in NWO Holdco, which wholly owns Northwest Ohio Wind, LLC, a 100 ‑MW wind generation project in Paulding County, Ohio.

The Class A membership interest in NWO Holdco is held by a tax equity investor.

NorthStar Clean Energy has a 51 -percent ownership interest in Aviator Wind Equity Holdings, which holds a Class B membership interest in Aviator Wind, the holding company of a 525 ‑MW wind generation project in Coke County, Texas.

The Class A membership interest in Aviator Wind is held by a tax equity investor.

Earnings, tax attributes, and cash flows generated by Newport Solar Holdings, NWO Holdco, and Aviator Wind are allocated among and distributed to the membership classes in accordance with the ratios specified in the associated limited liability company agreements;

NorthStar Clean Energy consolidates certain entities that it does not wholly own, but for which it manages and controls the entities’ operating activities.

NorthStar Clean Energy is the primary beneficiary of these entities because it has the power to direct the activities that most significantly impact the economic performance of the companies, as well as the obligation to absorb losses or the right to receive benefits from the companies.

Presented in the following table is information about the VIEs NorthStar Clean Energy consolidates:

Consolidated VIE NorthStar Clean Energy’s ownership interest Description of VIE

Aviator Wind Equity Holdings 51 ‑percent ownership interest 1

Holds a Class B membership interest in Aviator Wind

Aviator Wind Class B membership interest 2

Holding company of a 525 ‑MW wind generation project in Coke County, Texas

Newport Solar Holdings Class B membership interest 2

Holding company of a 180 ‑MW solar generation project in Jackson County, Arkansas

NWO Holdco Class B membership interest 2

Holding company of a 100 ‑MW wind generation project in Paulding County, Ohio

1 The remaining 49 ‑percent interest is presented as noncontrolling interest on CMS Energy’s consolidated balance sheets.

2 The Class A membership interest in the entity is held by a tax equity investor and is presented as noncontrolling interest on CMS Energy’s consolidated balance sheets.

Under the associated limited liability company agreement, the tax equity investor is guaranteed preferred returns from the entity .

Earnings, tax attributes, and cash flows generated by the entities in which NorthStar Clean Energy holds a Class B membership are allocated among and distributed to the membership classes in accordance with the ratios specified in the associated limited liability company agreements;

these ratios change over time and are not representative of the ownership interest percentages of each membership class.

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The liquidation tax gain (loss) is allocated to each investor’s capital account, resulting in income (loss) equal to the period change in the investor’s capital account balance.

Newport Solar Holdings, NWO Holdco, Aviator Wind Equity Holdings, and Aviator Wind are VIEs.

In accordance with the associated limited liability company agreements, the tax equity investors are guaranteed preferred returns from these entities.

However, NorthStar Clean Energy manages and controls the entities’ operating activities.

As a result, NorthStar Clean Energy is the primary beneficiary, as it has the power to direct the activities that most significantly impact the economic performance of the companies, as well as the obligation to absorb losses or the right to receive benefits from the companies.

NorthStar Clean Energy consolidates Newport Solar Holdings, NWO Holdco, Aviator Wind Equity Holdings, and Aviator Wind and presents the Class A membership interests and 49 percent of Aviator Wind Equity Holdings as noncontrolling interests.

Presented in the following table are the carrying values of the VIEs’ assets and liabilities included on CMS Energy’s consolidated balance sheets:

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Plant, property, and equipment, net 1,024 1,064

Construction work in progress — 156

Other non-current assets 3 3

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$ 1,052 $ 1,102

Current portion of long-term debt $ — $ 100

Accounts payable $ 8 $ 12

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Non-consolidated VIEs:

CMS Energy has variable interests in T.E.S.

NorthStar Clean Energy has variable interests in T.E.S.

Filer City, Grayling, Genesee, and Craven.

While CMS Energy owns 50 percent of each partnership, it is not the primary beneficiary of any of these partnerships because decision making is shared among unrelated parties, and no one party has the ability to direct the activities that most significantly impact the entities’ economic performance, such as operations and maintenance, plant dispatch, and fuel strategy.

While NorthStar Clean Energy owns 50 percent of each partnership, it is not the primary beneficiary of any of these partnerships because decision making is shared among unrelated parties, and no one party has the ability to direct the activities that most significantly impact the entities’ economic performance, such as operations and maintenance, plant dispatch, and fuel strategy.

The partners must agree on all major decisions for each of the partnerships.

Presented in the following table is information about these partnerships:

Name Nature of the Entity Nature of CMS Energy’s Involvement

Name Nature of the Entity Nature of NorthStar Clean Energy’s Involvement

Filer City Coal-fueled power generator Long-term PPA between partnership and Consumers

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This results in fuel cost savings that each partnership shares with Consumers’ customers.

The creditors of these partnerships do not have recourse to the general credit of CMS Energy or Consumers.

CMS Energy’s maximum risk exposure to these partnerships is generally limited to its investment in the partnerships, which is included in investments on its consolidated balance sheets in the amount of $ 74 million at December 31, 2023 and $ 71 million at December 31, 2022.

Exit Activities and Discontinued Operations

Exit Activities:

In accordance with its Clean Energy Plan, Consumers retired the D.E.

Karn coal-fueled electric generating units in June 2023 and plans to retire the J.H.

The creditors of these partnerships do not have recourse to the general credit of CMS Energy, NorthStar Clean Energy, or Consumers.

NorthStar Clean Energy’s maximum risk exposure to these partnerships is generally limited to its investment in the partnerships, which is included in investments on CMS Energy’s consolidated balance sheets in the amount of $ 64 million at December 31, 2024 and $ 74 million at December 31, 2023.

Exit Activities and Asset Sales

Retention Incentive Program:

In accordance with its Clean Energy Plan, Consumers plans to retire the J.H.

Campbell coal-fueled generating units in 2025.

In order to ensure necessary staffing at both D.E.

Karn and J.H.

Campbell through retirement, Consumers has implemented retention incentive programs.

The aggregate cost of the D.E.

Karn program, which is now complete, was $ 32 million.

In order to ensure necessary staffing at J.H.

Campbell through retirement, Consumers has implemented a retention incentive program.

The aggregate cost of the J.H.

Campbell program through 2025 is estimated to be $ 50 million.

Campbell program through 2025 is estimated to be less than $ 50 million.

The MPSC has approved deferred accounting treatment for these costs;

these expenses are deferred as a regulatory asset.

As of December 31, 2023, the cumulative cost incurred and charged to maintenance and other operating expenses related to the D.E.

Karn retention incentive program was $ 16 million.

Additionally, an amount of $ 4 million was capitalized as a cost of plant, property, and equipment and an amount of $ 12 million was deferred as a regulatory asset.

The cumulative cost incurred and deferred as a regulatory asset related to the J.H.

As of December 31, 2024, the cumulative cost incurred and deferred as a regulatory asset related to the J.H.

Campbell retention incentive program was $ 43 million.

The regulatory assets for both programs will be collected from customers over three years.

Amounts deferred under the program are subsequently collected from customers over three years .

Presented in the following table is a reconciliation of the retention benefit liability recorded in other liabilities on Consumers’ consolidated balance sheets:

Years Ended December 31 2023 2022

Year Ended December 31 2024 2023 1

Retention benefit liability at beginning of period $ 16 $ 21

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Retention benefit liability at the end of the period 2

1 Includes amounts associated with a retention incentive program at the D.E.

Karn coal-fueled generating units;

this program concluded following the units’ retirement in June 2023.

2 Includes current portion of other liabilities of $ 14 million at December 31, 2024 and $ 7 million at December 31, 2023.

Discontinued Operations:

In 2021, EnerBank was acquired by a non-affiliated company.

CMS Energy received proceeds of over $ 1.0 billion from the transaction and recognized a pre-tax gain of $ 657 million in 2021.

In March 2022, CMS Energy received $ 6 million of additional proceeds as the result of a post-closing adjustment.

Net of related transaction costs, CMS Energy recognized a pre-tax gain of $ 5 million during 2022.

EnerBank’s results of operations through the date of the sale are presented as income from discontinued operations on CMS Energy’s consolidated statements of income for the year ended December 31, 2021.

The table below presents the financial results of EnerBank included in income from discontinued operations:

Years Ended December 31 2022 2021

Operating revenue $ — $ 209

Operating expenses — 60

Interest expense — 34

Income before income taxes $ — $ 115

Gain on sale 5 657

Income from discontinued operations before income taxes $ 5 $ 772

Income tax expense 1 170

Income from discontinued operations, net of tax $ 4 $ 602

Sale of ASP Business:

In April 2024, Consumers sold its unregulated ASP business to a non-affiliated company.

Consumers received proceeds of $ 124 million from the transaction, which resulted in a $ 110 million gain on the transaction.

In its order approving the settlement of Consumers’ 2023 gas rate case, the MPSC authorized sharing the gain, net of transaction costs, with customers.

Accordingly, Consumers recorded the gain on the transaction as a regulatory liability on its consolidated balance sheets.

For additional information, see Note 2, Regulatory Matters.

In conjunction with the sale, Consumers executed a long-term services agreement, under which it will continue to provide certain services associated with the ASP business for a fee, including billing, collection, and call center services.

Other Sale Activity:

In December 2024, NorthStar Clean Energy entered into an agreement to sell, for approximately $ 40 million, a noncontrolling interest in the holding company of a 100 ‑MW wind project located in Paulding County, Ohio.

Additionally, in January 2025, NorthStar Clean Energy signed an agreement to sell, for approximately $ 10 million, a noncontrolling interest in the holding company of a 24 ‑MW solar project located in Delta Township, Michigan and all interest in the holding company of a 3 ‑MW solar project located in Phillips, Wisconsin.

These sales are expected to close in the first half of 2025.

Report of Independent Registered Public Accounting Firm

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Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting appearing under Item 9A.

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control Over Financial Reporting appearing under Item 9A.

Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits.

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Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control Over Financial Reporting appearing under Item 9A.

Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data