What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-10 compared with 2025-02-11 · 445 added, 359 removed, 2276 unchanged (26% of the section changed)

15 unchanged sentences

Significant Accounting Policies

New Accounting Standards

Regulatory Matters

43 unchanged sentences

Income From Continuing Operations 1,002 947 807

Income From Discontinued Operations, Net of Tax of $ — , $ — , and $ 1

Income From Discontinued Operations, Net of Tax of $ — for all periods

Net Income 1,002 947 808

3 unchanged sentences

Net Income Available to Common Stockholders $ 1,061 $ 993 $ 877

In Millions, Except Per Share Amounts

Years Ended December 31 2024 2023 2022

Basic Earnings Per Average Common Share $ 3.53 $ 3.34 $ 3.01

Income from continuing operations per average common share available to common stockholders $ 3.34 $ 3.01 $ 2.84

Income from discontinued operations per average common share available to common stockholders — — 0.01

Basic Earnings Per Average Common Share $ 3.34 $ 3.01 $ 2.85

Diluted Earnings Per Average Common Share $ 3.53 $ 3.33 $ 3.01

Income from continuing operations per average common share available to common stockholders $ 3.33 $ 3.01 $ 2.84

Income from discontinued operations per average common share available to common stockholders — — 0.01

Diluted Earnings Per Average Common Share $ 3.33 $ 3.01 $ 2.85

The accompanying notes are an integral part of these statements.

6 unchanged sentences

Prior service credit adjustment, net of tax of $ — for all periods

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

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

Amortization of prior service credit, net of tax of $ — for all periods

( 1 ) — ( 1 )

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

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

Other Comprehensive Income 5 5 6

3 unchanged sentences

The accompanying notes are an integral part of these statements.

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CMS Energy Corporation

8 unchanged sentences

Postretirement benefits contributions ( 16 ) ( 13 ) ( 12 )

Gain from sale of EnerBank — — ( 5 )

Other non‑cash operating activities and reconciling adjustments ( 238 ) ( 241 ) ( 274 )

9 unchanged sentences

Covert Generating Station acquisition — — ( 812 )

Net proceeds from sale of EnerBank — — 5

Proceeds from sale of ASP business — 124 —

8 unchanged sentences

Payment of dividends on common and preferred stock ( 663 ) ( 626 ) ( 579 )

Proceeds from the sale of membership interests in VIEs 44 — —

Proceeds from the sale of membership interest in VIE to tax equity investor 15 — 86

3 unchanged sentences

Net cash provided by financing activities 2,240

Years Ended December 31 2024 2023 2022

Net Increase (Decrease) in Cash and Cash Equivalents, Including Restricted Amounts 437 ( 70 ) 66

1 unchanged sentence

Cash and Cash Equivalents, Including Restricted Amounts, End of Period $ 615

Years Ended December 31 2025 2024 2023

Other Cash Flow Activities and Non‑cash Investing and Financing Activities

4 unchanged sentences

Capital expenditures not paid $ 662 $ 517 $ 265

Deemed contribution from sale of membership interest 35 — —

The accompanying notes are an integral part of these statements.

47 unchanged sentences

Postretirement benefits 95 96

Asset retirement obligations 728 771

Deferred investment tax credit 118 122

29 unchanged sentences

Common stock reacquired ( 39 ) ( 142 ) ( 64 ) — — —

Adjustment for sale of membership interests in VIEs ( 34 ) — —

At end of period 306,409 298,790 294,440 6,510 6,009 5,705

Accumulated Other Comprehensive Loss

At beginning of period ( 46 ) ( 52 ) ( 59 )

Retirement benefits liability

5 unchanged sentences

At end of period ( 36 ) ( 41 ) ( 46 )

Derivative instruments

At beginning of period

Unrealized gain on derivative instruments

Reclassification adjustments included in net income — — 1

At end of period

At end of period ( 41 ) ( 46 ) ( 52 )

Retained Earnings

6 unchanged sentences

At beginning and end of period 224 224 224

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

Number of Shares

Years Ended December 31 2024 2023 2022 2024 2023 2022

Noncontrolling Interests

At beginning of period 518 581 580

Sale of membership interests in VIEs 78 — —

Sale of membership interest in VIE to tax equity investor 50 — 86

44 unchanged sentences

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

( 2 ) 3 ( 1 )

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

Other Comprehensive Income 4 — 17

Other Comprehensive Income (Loss) ( 2 ) 4 —

Comprehensive Income $ 1,127 $ 1,013 $ 867

The accompanying notes are an integral part of these statements.

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Consumers Energy Company

26 unchanged sentences

Increase (decrease) in notes payable ( 65 ) ( 28 ) 73

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

Increase (decrease) in notes payable – related parties 340 — ( 75 )

Stockholder contribution 920 735 475

49 unchanged sentences

Notes payable — 65

Notes payable – related parties 340 —

Accounts payable 1,229 917

12 unchanged sentences

Postretirement benefits 70 70

Asset retirement obligations 694 739

Deferred investment tax credit 118 122

57 unchanged sentences

Restricted cash and cash equivalents are held primarily for the repayment of securitization bonds and funds held in escrow.

Cash and cash equivalents may also be restricted to pay other contractual obligations such as leasing of coal railcars.

These amounts are classified as current assets since they relate to payments that could or will occur within one year.

47 unchanged sentences

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.

RECs and emission allowances are used to satisfy compliance obligations related to the generation of power.

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

RECs and other environmental credits are used to satisfy compliance obligations related to the generation of power and in support of sustainability commitments.

CMS Energy and Consumers classify these amounts within other assets on their consolidated balance sheets.

15 unchanged sentences

• Note 19, Variable Interest Entities

New Accounting Standards

Implementation of New Accounting Standards

ASU 2023‑09, Incomes Taxes (Topic 740):

Improvements to Income Tax Disclosures:

This standard, which was effective on January 1, 2025 for CMS Energy and Consumers, requires expanded annual disclosures of the income taxes, including a more detailed reconciliation of the effective tax rate and disaggregated information on federal and state income taxes.

The standard also requires disclosure of significant reconciling items and qualitative information about state and local jurisdictions contributing to income tax expense.

The adoption of the new standard did not impact CMS Energy’s or Consumers’ liquidity, financial condition, or results of operations.

The expanded disclosures required by this standard are included in Note 13, Income Taxes.

New Accounting Standards Not Yet Effective

ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses:

This standard requires public companies to provide disaggregated information about certain expense categories presented on the income statement.

The guidance calls for annual and interim disclosures that separate specified components, such as employee compensation, depreciation, and amortization, within relevant expense line items in the notes to the financial statements.

The standard is effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted.

CMS Energy and Consumers will adopt the guidance upon the effective date.

The standard will not have an impact on CMS Energy’s or Consumers’ consolidated net income, cash flows, or financial position.

ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software:

This standard updates guidance for capitalizing costs related to internal-use software development.

The amendments remove references to the previous “project stage” model and clarify the threshold for when capitalization should begin, focusing on whether completion of the project is probable.

The amendments are effective for annual and interim reporting periods beginning after December 15, 2027.

The guidance may be applied on a prospective, retrospective, or modified transition basis.

Early adoption is permitted.

CMS Energy and Consumers are currently evaluating the new standard.

Regulatory Matters

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 power supply cost recovery and gas cost recovery processes.

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

These parties often challenge various aspects of those proceedings, including the prudence of Consumers’ policies and practices, and seek cost disallowances and other relief.

The parties also have appealed significant MPSC orders.

The parties also have appealed significant MPSC and FERC orders.

Depending upon the specific issues, the outcomes of rate cases and proceedings, including judicial proceedings challenging MPSC and FERC orders or other actions, could negatively affect CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations.

7 unchanged sentences

Regulatory assets

2022 PSCR underrecovery 1

Energy waste reduction plan incentive 1

Retention incentive program 2

2022 PSCR underrecovery 3

Total current regulatory assets $ 104 $ 229

6 unchanged sentences

Energy waste reduction plan incentive 1

Energy waste reduction plan 3

Ludington overhaul contract dispute 2

Service restoration cost deferral 4

Energy waste reduction plan 3

Postretirement benefits expense deferral mechanism 2

Renewable Energy Plan 3

Retention incentive program 2

2022 PSCR underrecovery 1

Total non-current regulatory assets $ 3,355 $ 3,569

6 unchanged sentences

Income taxes, net 1,118 1,163

Renewable energy plan 51 29

ASP gain 46 —

Energy waste reduction plan 68 41

Renewable energy grant 40 43

Green giving program 41 —

Postretirement benefits expense deferral mechanism 40 37

Renewable energy grant 38 40

ASP gain 19 46

Renewable Energy Plan — 51

Total non-current regulatory liabilities $ 4,091 $ 4,067

Total regulatory liabilities $ 4,176 $ 4,178

1 The MPSC has provided a specific return on these regulatory assets.

1 These regulatory assets have arisen from an alternative-revenue program and are not associated with incurred costs or capital investments.

Therefore, the MPSC has provided for recovery without a return.

3 These regulatory assets represent incurred costs for which the MPSC has provided recovery without a return on investment.

2 This regulatory asset is included in rate base, thereby providing a return.

3 The MPSC has provided a specific return on these regulatory assets.

4 These regulatory assets represent incurred costs for which the MPSC has provided recovery without a return on investment.

Regulatory Assets

2022 PSCR Underrecovery:

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.

At the end of 2022, Consumers had recorded $ 401 million of under-recovered power supply costs.

In February 2023, the MPSC authorized Consumers to recover the 2022 underrecovery amount over three years, providing immediate relief to electric customers.

Energy Waste Reduction Plan Incentive:

1 unchanged sentence

Consumers accounts for this program as an alternative-revenue program that meets the criteria for recognizing revenue related to the incentive as soon as energy savings exceed the annual targets established by the MPSC.

In November 2024, the MPSC approved a settlement agreement authorizing Consumers to collect $ 58 million during 2025 as an incentive for exceeding its statutory savings targets in 2023.

In January 2026, the MPSC approved a settlement agreement authorizing Consumers to collect $ 64 million during 2026 as an incentive for exceeding its statutory savings targets in 2024.

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

6 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 Asset Sales.

These MPSC-approved retention plans concluded in November 2025.

For additional details regarding retention incentive programs, see Note 20, Exit Activities and Asset Sales.

2022 PSCR Underrecovery:

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.

At the end of 2022, Consumers had recorded $ 401 million of under-recovered power supply costs.

In 2023, the MPSC authorized Consumers to recover the 2022 underrecovery amount over three years, providing immediate relief to electric customers.

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

1 unchanged sentence

Campbell coal-fueled generating units in 2025.

Upon the units’ retirement, Consumers will receive regulatory asset treatment to recover their remaining book value, as well as a 9.0 ‑percent return on equity, through 2040, the units’ original retirement date.

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

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.

The MPSC authorized regulatory asset treatment for Consumers to recover the remaining book value of the units upon their retirement, as well as a 9.0 ‑percent return on equity, through 2040, the units’ original retirement date.

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 non ‑ current regulatory asset on its consolidated balance sheets.

As discussed further below, the retirement of J.H.

Campbell is subject to temporary extensions under emergency orders issued by the U.S.

Secretary of Energy.

Such orders authorize Consumers to obtain cost recovery at FERC;

thus, Consumers has deferred the costs of complying with these orders as a regulatory asset.

Postretirement Benefits:

1 unchanged sentence

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.

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 11, Retirement Benefits.

1 unchanged sentence

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.

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

Consumers has removed from plant, property, and equipment and recorded as a regulatory asset the book value of these units.

8 unchanged sentences

Additionally, ash disposal costs related to Consumers’ retired coal-fueled generating units may be deferred as a regulatory asset and collected over a ten ‑ year period.

In its 2022 order approving Consumers’ Clean Energy Plan, the MPSC authorized similar treatment for the decommissioning and ash disposal costs associated with the J.H.

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

In its 2022 order approving Consumers’ integrated resource plan, the MPSC authorized similar treatment for the decommissioning and ash disposal costs associated with the J.H.

Campbell coal-fueled generating units that were planned for retirement in 2025.

Unamortized Loss on Reacquired Debt:

3 unchanged sentences

For additional information, see Note 4, Contingencies and Commitments—Consumers Gas Utility Contingencies.

Energy Waste Reduction Plan:

The MPSC allows Consumers to collect surcharges from customers to fund its energy waste reduction plan.

The amount of spending incurred in excess of surcharges collected is recorded as a regulatory asset and amortized as surcharges are collected from customers over the plan period.

The amount of surcharges collected in excess of spending incurred is recorded as a regulatory liability and amortized as costs are incurred.

Ludington Overhaul Contract Dispute:

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.

Consumers will defer such costs while post‑verdict proceedings and any appeals in the litigation with TAES and Toshiba continue;

such costs will be offset, in part or in whole, by 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.

During 2025, cash expenditures associated with the Ludington overhaul contract dispute were $ 30 million.

For additional details on the contract dispute, see Note 4, Contingencies and Commitments—Consumers Electric Utility Contingencies.

Service Restoration Cost Deferral:

As a result of catastrophic storms in Consumers’ electric service territory, Consumers incurred significant service restoration costs during March and April 2025.

In April 2025, Consumers filed with the MPSC an ex parte application requesting approval to defer, as a regulatory asset, operating and maintenance expenses associated with the storms.

In June 2025, the MPSC approved the application, authorizing the deferral of these expenses for accounting purposes.

Recovery of this regulatory asset will be requested in a future case.

Energy Waste Reduction Plan:

Michigan law requires electric and gas utilities to implement programs that reduce energy consumption through energy efficiency and demand-side energy conservation.

Utilities may recover the cost of achieving specified reductions in customers’ electricity and gas use through surcharges.

The amount of spending incurred in excess of surcharges collected is recorded as a regulatory asset and amortized as surcharges are collected from customers over the plan period.

The amount of surcharges collected in excess of spending incurred is recorded as a regulatory liability and amortized as costs are incurred.

Postretirement Benefits Expense Deferral Mechanism:

1 unchanged sentence

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

Renewable Energy Plan:

Under Michigan law, renewable energy standards specify how much electricity must come from renewable sources and which technologies, such as wind, solar, and certain biomass, qualify.

Utilities may recover compliance costs, including renewable power purchases (and related financial mechanisms), depreciation, property taxes, interest, and other operating and maintenance expenses for company-owned renewable assets, along with a return on those assets.

The MPSC allows Consumers to transfer and collect a portion of these costs through its PSCR process.

Incremental costs may be collected through surcharges.

If spending exceeds amounts collected, the difference is recorded as a regulatory asset and amortized as recovered from customers;

this excludes amounts related to return on equity.

If collections exceed spending, the excess is recorded as a regulatory liability and amortized as future costs are incurred for operating renewable facilities and purchasing RECs under renewable energy agreements.

Regulatory Liabilities

9 unchanged sentences

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.

Green Giving Program:

In conjunction with Consumers’ voluntary green pricing program, the MPSC has directed Consumers to use surplus program funds to support renewable-energy participation by low‑income customers.

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.

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, 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.

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

2024 Electric Rate Case:

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.

In May 2024, Consumers filed an application with the MPSC seeking a rate increase of $ 325 million, made up of two components.

First, Consumers requested a $ 303 million annual rate increase, based on a 10.25 ‑percent authorized return on equity for the projected 12 ‑ month period ending February 28, 2026.

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.

Second, Consumers requested approval of a $ 22 million surcharge for the recovery of distribution investments made in 2023 that exceeded the rates authorized in accordance with previous electric rate orders.

In October 2024, Consumers revised its requested increase to $ 277 million, primarily to reflect the removal of projected capital investments associated with certain solar facilities that Consumers incorporated into its amended Renewable Energy Plan.

In March 2025, the MPSC issued an order authorizing an annual rate increase of $ 176 million, which is inclusive of a $ 22 million surcharge for the recovery of distribution investments made in 2023 that exceeded the rate amounts authorized in accordance with previous electric rate orders.

The approved rate increase is based on a 9.90 ‑percent authorized return on equity.

The new rates became effective March 15, 2024.

The new rates became effective in April 2025

Campbell Emergency Order:

In May 2025, before the planned closure of J.H.

Campbell, the U.S.

Secretary of Energy issued an emergency order under section 202(c) of the Federal Power Act requiring J.H.

Campbell to continue operating for 90 days, through August 20, 2025.

Subsequently, the U.S.

Secretary of Energy issued two additional emergency orders for 90 days each, ultimately requiring continued operation of J.H.

Campbell through February 17, 2026.

These orders stated that continued operation of J.H.

Campbell was required to meet an energy emergency across MISO’s North and Central regions.

Consistent with the Federal Power Act and DOE regulations, the orders authorize Consumers to obtain cost recovery at FERC.

As directed, Consumers has continued to make J.H.

Campbell available in the MISO market and, in June 2025, filed a complaint at FERC seeking a modification of the MISO Tariff that would enable Consumers to recover the costs of complying with the emergency orders.

Consumers’ complaint sought a mechanism in the MISO Tariff that would allow allocation of those compliance costs across the MISO North and Central regions, consistent with the nature of the energy emergency declared in the U.S.

Secretary of Energy orders.

In August 2025, FERC granted Consumers’ complaint and ordered MISO to revise its tariff accordingly.

MISO submitted a compliance filing with FERC in September 2025, and FERC approval of the compliance filing remains pending.

In January 2026, Consumers filed a request at FERC seeking recovery of the net financial impact of complying with the May 2025 emergency order, which was $ 42 million after applying MISO revenues of $ 78 million.

This filing encompasses recovery sought by the joint owners of J.H.

For the second emergency order period through December 31, 2025, the net financial impact of compliance was $ 93 million after applying MISO revenues of $ 77 million.

Consumers will seek recovery of these compliance costs at a later date, consistent with rate recovery sought for the May 2025 emergency order.

The ultimate financial impact remains subject to the outcome of the FERC proceeding and any future guidance or interpretation.

Consumers Gas Utility

2024 Gas Rate Case:

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

In December 2024, Consumers filed an application with the MPSC seeking an annual rate increase of $ 248 million based on a 10.25 ‑percent authorized return on equity for the projected 12‑month period ending October 31, 2026.

In July 2025, Consumers revised its requested increase to $ 217 million.

In September 2025, the MPSC issued an order authorizing an annual rate increase of $ 157.5 million, based on a 9.80 ‑percent authorized return on equity.

The new rates became effective in November 2025.

The PSCR and GCR ratemaking processes are designed to allow Consumers to recover all of its power supply and purchased natural gas costs if incurred under reasonable and prudent policies and practices.

3 unchanged sentences

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

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

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

December 31 2025 2024

PSCR underrecoveries $ 38 $ —

Accounts receivable and accrued revenue $ 38 $ —

PSCR overrecoveries $ — $ 13

1 unchanged sentence

Accrued rate refunds $ 28 $ 38

PSCR Plans and Reconciliations:

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.

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 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

7 unchanged sentences

In 2012, CMS Land and EGLE finalized an agreement establishing the final remedies and the future water quality criteria at the site.

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

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

At December 31, 2025, 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 1 percent on annual operating and maintenance costs.

The undiscounted amount of the remaining obligation is $ 62 million.

12 unchanged sentences

Consumers estimates its liability for NREPA sites for which it can estimate a range of loss to be between $ 2 million and $ 3 million.

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.

At December 31, 2025, 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.

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

12 unchanged sentences

Ludington Overhaul Contract Dispute:

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.

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

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

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

6 unchanged sentences

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.

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.

Consumers believes the counterclaims filed by TAES and Toshiba are without merit, but cannot predict the financial impact or outcome of 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 2023, Toshiba announced that TBJH became the majority shareholder and new parent company of Toshiba through a common stock purchase.

The case against TAES went to trial before a jury and, in December 2025, the jury rendered a verdict in Consumers’ and DTE Electric’s favor.

The jury found that TAES breached the parties’ contract and awarded damages of $ 383 million.

The parties separately stipulated to $ 11 million in additional liquidated damages for late performance by TAES.

These amounts are subject to pre- and post-judgment interest.

In addition, the jury rejected TAES’ counterclaim, determining that Consumers and DTE Electric did not breach the contract.

The parent guaranty provided by Toshiba allows Consumers and DTE Electric to recover legal costs in addition to damages.

The parties are still engaged in post-verdict proceedings at the District Court and the jury verdict may be appealed;

these processes could take two years or more to

conclude with finality.

The jury verdict was a favorable outcome for Consumers but an unfavorable outcome in these additional proceedings could have a material adverse effect on CMS Energy’s and Consumers’ financial condition, results of operations, or liquidity.

Consumers and DTE Electric must still also resolve their claim against Toshiba under the parent guaranty, which is still pending but which was bifurcated by the Court from the claims against TAES.

Previously, 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.

Consumers and DTE Electric continue to monitor this development, but do not believe that this affects their rights under the parent guaranty provided by Toshiba.

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.

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.

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 and DTE Electric do not believe that this affects their rights under the parent guaranty provided by Toshiba.

With MPSC approval, Consumers and DTE Electric were authorized 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 remains pending.

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

Consumers cannot predict the financial impact or outcome of such proceedings.

Consumers Gas Utility Contingencies

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Presented in the following table are CMS Energy’s and Consumers’ guarantees at December 31, 2025:

Guarantee Description Issue Date Expiration Date Maximum Obligation Carrying Amount

Guarantee Description

Issue Date Expiration Date Maximum Obligation Carrying Amount

CMS Energy, including Consumers

Indemnity obligations from sale of membership interests in VIEs 1

various indefinite $ 258 $ —

various various $ 230 $ —

Indemnity obligations from stock and asset sale agreements 2

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2011 indefinite $ 30 $ —

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

1 These obligations arose from the sale of membership interests in Aviator Wind, BG Solar Holdings, 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.

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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 Aviator Wind, Newport Solar Holdings, and NWO Holdco, see Note 18, Variable Interest Entities.

For further details on NorthStar Clean Energy’s ownership interest in these entities, see Note 19, 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.

The maximum obligation amount is mostly related to an Equatorial Guinea tax claim.

3 This obligation comprises a guarantee provided by Consumers to the U.S.

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

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

Additionally, in the normal course of business, CMS Energy, Consumers, and certain other subsidiaries of CMS Energy have entered into various agreements containing tax and other indemnity provisions for which they are unable to estimate the maximum potential obligation.

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These other lawsuits, proceedings, and unasserted claims may involve personal injury, property damage, contracts, environmental matters, federal and state taxes, rates, licensing, employment, and other matters.

Further, CMS Energy and Consumers occasionally self-report certain regulatory non‑compliance matters that may or may not eventually result in administrative proceedings.

Certain of these matters, while potentially substantial, are covered by insurance and the insurer or insurers are involved in the relevant proceedings.

Further, CMS Energy and Consumers occasionally self-report

certain regulatory non‑compliance matters that may or may not eventually result in administrative proceedings.

CMS Energy and Consumers believe that the outcome of any one of these proceedings and potential claims will not have a material negative effect on their consolidated results of operations, financial condition, or liquidity.

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Purchase Obligations:

Purchase obligations arise from long-term contracts for the purchase of commodities and related services, and construction and service agreements.

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

Purchase obligations arise from long-term contracts for the purchase of commodities and related services, primarily long-term PPAs, and construction and service agreements.

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

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Capacity and energy charges under the MCV PPA were $ 360 million in 2025, $ 358 million in 2024, and $ 340 million in 2023.

In September 2025, Consumers entered into a new ten ‑year PPA with the MCV Partnership for the purchase of up to 1,240 MW of capacity and associated energy from the MCV Facility, effective June 1, 2030.

Under the terms of the new agreement, Consumers will pay a monthly capacity charge of $ 5.00 per MWh of available capacity.

Energy payments include a fixed component designed to recover non-fuel operating costs and a variable component based on the MCV Partnership’s cost of production for

energy delivered to Consumers.

The agreement, which is subject to MPSC approval, supports Consumers’ ongoing resource adequacy and energy supply planning efforts.

Consumers has PPAs expiring through 2060 with various counterparties.

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$ 1,475 $ 1,725

$ 1,725 $ 1,975

Convertible senior notes 1

2028 $ 800 $ 800

$ 1,800 $ 800

Junior subordinated notes 4

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Term loan facilities variable 2025 $ — $ 90

2025 $ 90 $ —

variable 2025 — 400

Total CMS Energy, parent only $ 6,285 $ 5,025

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Consumers $ 12,196 $ 11,370

NorthStar Clean Energy, including subsidiaries

NorthStar Clean Energy

Revolving credit facility variable 8

Construction financing agreement 9

variable Five years after conversion date 223 —

Total principal amount outstanding $ 18,939 $ 16,545

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Unamortized issuance costs ( 154 ) ( 130 )

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.

Total CMS Energy long-term debt $ 17,807 $ 15,194

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

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

The conversion rate will be subject to adjustment for

anti‑dilutive events and fundamental change and redemption provisions as described in the related indentures.

There are no sinking fund requirements for the notes.

2 At December 31, 2025, the conversion price for the notes was $ 73.61 per share of common stock.

Unamortized debt costs associated with this issuance were $ 6 million at December 31, 2025 and $ 9 million at December 31, 2024.

3 At December 31, 2025, the conversion price for the notes was $ 90.61 per share of common stock.

Unamortized debt costs associated with this issuance were $ 12 million at December 31, 2025.

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6 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 On June 1, 2035, and every five years thereafter, the notes will reset to an interest rate equal to the five‑year treasury rate plus 1.961 percent.

8 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, 2025, the weighted-average interest rate for the loans issued under this facility was 5.436 percent.

9 Loans under this facility have an interest rate of one-month Term SOFR plus 2.250 percent.

At December 31, 2025, the weighted-average interest rate for the loans issued under this facility was 6.476 percent.

At completion of project construction, scheduled for the first half of 2026, a portion of this financing will convert into a term loan that will mature five years after the conversion date.

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

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$ 12,520 $ 11,395

$ 11,395 $ 10,397

In Millions, Except Interest Rate and Maturity

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3 The interest rate on these tax‑exempt revenue bonds will reset on October 1, 2027.

4 The weighted-average interest rate for Consumers’ securitization bonds issued through its subsidiary, Consumers 2014 Securitization Funding, was 3.528 percent at December 31, 2024 and 3.421 percent at December 31, 2023.

4 The weighted-average interest rate for Consumers’ securitization bonds issued through its subsidiary, Consumers 2014 Securitization Funding, was 3.528 percent at December 31, 2025 and 2024.

5 Principal and interest payments are made semiannually.

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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.

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 discounts associated with the repurchase of Consumers’ first mortgage bonds were $ 5 million at December 31, 2025 and 2024.

Unamortized issuance costs were $ 9 million at December 31, 2025 and $ 7 million at December 31, 2024.

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CMS Energy, parent only

Term loan credit agreement $ 400 variable September 2024 September 2025

Term loan credit agreement 1

90 variable December 2024 December 2025

Junior subordinated notes $ 1,000 6.500 February 2025 June 2055

Term loan credit agreement 110 variable February 2025 December 2025

Convertible senior notes 1,000 3.125 November 2025 May 2031

Total CMS Energy, parent only $ 2,110

First mortgage bonds $ 600 4.600 January 2024 May 2029

First mortgage bonds 700 4.700 August 2024 January 2030

NorthStar Clean Energy

Construction financing agreement $ 223 variable February 2025 Five years after conversion date

Total NorthStar Clean Energy $ 223

First mortgage bonds $ 500 4.500 May 2025 January 2031

First mortgage bonds 625 5.050 May 2025 May 2035

Total Consumers $ 1,125

Total CMS Energy $ 3,458

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 2025:

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CMS Energy, parent only

Senior notes $ 250 3.875 January 2024 March 2024

Term loan credit agreement $ 400 variable February 2025 September 2025

Term loan credit agreement 200 variable February 2025 December 2025

Senior notes 250 3.600 November 2025 November 2025

Total CMS Energy, parent only $ 850

First mortgage bonds 1

$ 250 3.125 September 2024 August 2024

First mortgage bonds 52 3.190 December 2024 December 2024

Total Consumers $ 302

Total CMS Energy $ 850

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 $ 184 million during 2025 in exchange for cash of $ 109 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.

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 $ 72 million during 2025, which was recorded in other income on CMS Energy’s consolidated statements of income.

Interest expense related to the repurchased bonds was $ 28 million for the year ended December 31, 2025, which was recorded in interest expense – related parties on Consumers’ consolidated statements of income.

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

On a consolidated basis, CMS Energy’s repurchase of Consumers’ first mortgage bonds resulted in a pre-tax gain of $ 110 million for the year ended December 31, 2024.

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

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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.

Its short-term authorization ends on May 2, 2026.

In January 2026, Consumers filed an application with FERC for authority to issue long-term and short-term debt securities between May 1, 2026 and April 30, 2028.

First Mortgage Bonds:

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Total CMS Energy $ 950 $ 888 $ 1,878 $ 1,256 $ 812

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

NorthStar Clean Energy, including subsidiaries

Long-term debt $ 573 $ 263 $ 843 $ 1,256 $ 812

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

Credit Facilities:

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CMS Energy, parent only

December 14, 2027 1

Unsecured revolving credit facility, expiring November 2030 1

$ 750 $ — $ 35 $ 715

September 30, 2025

NorthStar Clean Energy, including subsidiaries

May 7, 2027 2

Unsecured letter of credit facility, expiring September 2026

NorthStar Clean Energy

Secured revolving credit facility, expiring May 2028 2

$ 250 $ 235 $ 10 $ 5

September 25, 2025 3

December 14, 2027

Secured letter of credit facility, expiring September 2028 3

Secured letter of credit facility 4

Secured revolving credit facility, expiring November 2030 5,6

$ 1,100 $ — $ 6 $ 1,094

November 18, 2025

Secured revolving credit facility, expiring November 2028 5,6

Secured letter of credit facility, expiring May 2027 5

Unsecured letter of credit facility, expiring March 2028 50 — 43 7

Unsecured letter of credit facility 7

1 There were no borrowings under this facility during the year ended December 31, 2025.

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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.

For more information regarding Aviator Wind Equity Holdings, see Note 18, Variable Interest Entities.

3 This letter of credit facility is available to a subsidiary of Aviator Wind Equity Holdings and is secured by assets of Aviator Wind.

For more information regarding Aviator Wind Equity Holdings and Aviator Wind, see Note 19, Variable Interest Entities.

4 The letter of credit facility is available to certain subsidiaries of NorthStar Clean Energy.

The letter of credit facility is secured under a construction-to-term financing agreement and will expire five years after the term conversion date.

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

6 There were no borrowings under these facilities during the year ended December 31, 2025.

7 Uncommitted letter of credit facility with automatic renewal provisions and therefore no expiration.

Short-term Borrowings:

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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, 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.

At December 31, 2025, there were no commercial paper notes outstanding under this program.

In December 2025, 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.

At December 31, 2025, outstanding borrowings under the agreement were $ 340 million bearing interest at 3.859 percent, recorded as current notes payable – related parties on Consumers’ consolidated balance sheets.

NorthStar Clean Energy’s Supplier Financing Program:

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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.

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.

3 unchanged sentences

Payables confirmed 158 22

Payments and other adjustments ( 102 ) —

Balance of payables under suppler financing program at end of period $ 78 $ 22

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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.

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

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

cash or shares.

Under the forward sales transactions, 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 cash or shares.

CMS Energy may settle the contracts at any time through their maturity dates, and presently intends to physically settle the contracts by delivering shares of its common stock.

As of December 31, 2024, CMS Energy had 0.4 million shares contracted under forward sale agreements at a weighted average initial forward price of $ 69.43 per share.

During the year ended December 31, 2025, CMS Energy entered into forward sale agreements for approximately 6.7 million shares at a weighted average initial forward price of $ 71.08 per share.

During the same period, CMS Energy settled forward sale contracts under this program by issuing approximately 7.0 million shares at a weighted average price of $ 71.16 p er share, resulting in net proceeds o f $ 497 million .

Following these transactions , outstanding forward contracts under the program have an aggregate sales price of $ 8 million, maturing November 30, 2026.

The initial forward price in the forward equity sale contracts includes a deduction for commissions and will be adjusted on a daily basis over the term based on an interest rate factor and decreased on certain dates by certain predetermined amounts to reflect expected dividend payments.

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Nonqualified deferred compensation plan liabilities $ 36 $ 34 $ 27 $ 25

Derivative instruments 3 — — —

Total liabilities $ 39 $ 34 $ 27 $ 25

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

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

Cash Equivalents:

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CMS Energy and Consumers value their derivative instruments using either a market approach that incorporates information from market transactions, or an income approach that discounts future expected cash flows to a present value amount.

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

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

CMS Energy’s and Consumers’ derivatives are classified as Level 2 and 3.

The derivatives classified as Level 2 are interest rate swaps at NorthStar Clean Energy, which are valued using market-based inputs.

In February 2025, a subsidiary of NorthStar Clean Energy entered into floating-to-fixed interest rate swaps to reduce the impact of interest rate fluctuations associated with interest payments on certain future long‑term variable-rate debt.

The interest rate swaps economically hedge the future variability of interest payments on debt with a notional amount of $ 109 million.

Gains or losses on these swaps are reported in other expense on CMS Energy’s consolidated statements of income.

The amount recorded in other expense was $ 3 million for the year ended December 31, 2025.

The fair value of these swaps recorded in

other non-current liabilities on CMS Energy’s consolidated balance sheets totaled $ 3 million at December 31, 2025.

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 category of derivatives during the periods presented .

Consumers reports derivatives associated with FTRs in other current assets on its consolidated balance sheets.There was no material activity within the Level 3 category of derivatives during the periods presented.

Financial Instruments

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1 Includes current portion of long-term accounts receivable and notes receivable of $ 3 million at December 31, 2025 and $ 4 million at December 31, 2024.

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.

2 Includes current portion of long-term debt of $ 950 million at December 31, 2025 and $ 1.2 billion at December 31, 2024.

3 Includes current portion of long-term payables of $ 2 million at December 31, 2025 and 2024 .

4 Includes current portion of notes receivable – related party of $ 7 million at December 31, 2025 and 2024 .

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Plant, property, and equipment, gross

Generation 15 – 125

$ 7,171 $ 6,576

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Consumers’ plant retirements were $ 387 million for the year ended December 31, 2025 and $ 390 million for the year ended December 31, 2024.

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

4 Includes 13 hydroelectric dams that Consumers has agreed to sell, contingent upon MPSC and FERC approval.

For more information, see Note 20, Exit Activities and Asset Sales.

5 Underground storage includes base natural gas of $ 24 million at December 31, 2025 and $ 26 million for the year ended December 31, 2024.

Base natural gas is not subject to depreciation.

6 For the year ended December 31, 2025, Consumers fully impaired certain development assets totaling $ 20 million.

Of this amount, $ 15 million relates to two early-phase renewable natural gas development projects that have been paused indefinitely.

The remaining impairment charge was deferred as a regulatory asset and will be recovered through the Renewable Energy Plan.

Intangible Assets:

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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:

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Consumers is required to provide only its share of financing for the jointly owned utility facilities.

Consumers plans to retire the J.H.

Campbell coal-fueled generating units and, in 2022, removed an amount representing the projected remaining book value of the electric generating units upon their retirement from total plant, property, and equipment and recorded it as a regulatory asset on its consolidated balance sheets.

Consumers plans to retire J.H.

Campbell and, in 2022, removed an amount representing the projected remaining book value of the electric generating units upon their retirement from total plant, property, and equipment and recorded it as a regulatory asset on its consolidated balance sheets.

The retirement of J.H.

Campbell is subject to temporary extensions under emergency orders issued by the U.S.

Secretary of Energy.

For additional details, see Note 3, Regulatory Matters.

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.

Consumers and DTE Electric engaged in 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 4, Contingencies and Commitments—Ludington Overhaul Contract Dispute.

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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.

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

4 Includes related-party lease liabilities of $ 23 million, of which less than $ 1 million was current, at December 31, 2024 and 2023.

4 Includes related-party lease liabilities of $ 22 million, of which $ 1 million was current, at December 31, 2025 and 2024.

5 This rate excludes the impact of Consumers’ pipeline agreements and long-term PPAs accounted for as finance leases.

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For the year ended December 31, 2024, lease revenue from these power sales agreements was $ 105 million, which included variable lease payments of $ 61 million.

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

December 31, 2024

Total minimum lease payments $ 62

These non-cancelable operating leases expire in 2026;

remaining minimum rental payments amount to $ 18 million.

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

1 unchanged sentence

The effects of the lease are eliminated on CMS Energy’s consolidated financial statements.

Minimum rental payments to be received under Consumers’ direct financing lease are less than $ 1 million for each of the next five years and $ 6 million for the years thereafter.

Minimum rental payments to be received under Consumers’ direct financing lease are $ 1 million for each of the next five years and $ 6 million for the years thereafter.

The lease receivable was $ 5 million as of December 31, 2025, which does not include unearned income of $ 5 million.

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Presented below are the categories of assets that CMS Energy and Consumers have legal obligations to remove at the end of their useful lives and for which they have an ARO liability recorded:

ARO Description In-service Date Long-lived Assets

Closure of coal ash disposal areas various Generating plants coal ash areas

Gas distribution cut, purge, and cap various Gas distribution mains and services

ARO Description Long-lived Assets

Closure of coal ash disposal areas Generating plants coal ash areas

Gas distribution cut, purge, and cap Gas distribution mains and services

Asbestos abatement Electric and gas utility plant

Closure of renewable generation assets various Wind and solar generation facilities

Gas wells plug and abandon various Gas transmission and storage

Closure of renewable generation assets Wind and solar generation facilities

Capping and partial filling of water intake line Generating plant water intake line

Gas wells plug and abandon Gas transmission and storage

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 has been performing its review of legacy impoundments and of other aspects of the 2024 rule in accordance with the timelines prescribed by the rule, including the requirement to determine and report the presence of any CCR management units to the EPA by February 2027.

Consumers has been recording incremental AROs for legacy impoundments and CCR management units when a reasonable estimate of the fair value of the associated costs can be made, and the ultimate amount of any resulting ARO could be material.

In February 2026, the EPA issued a final rule extending the compliance milestone schedule for CCR management units.

This extension does not have a material impact on Consumers’ compliance strategy.

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

Presented in the following tables are the changes in CMS Energy’s and Consumers’ ARO liabilities:

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Renewable generation assets 105 17 — 3 — 125

Generating plant water intake line — — — 1 18 2

Gas wells plug and abandon 27 — ( 21 ) 1 ( 5 ) 2

Total Consumers $ 694 $ 27 $ ( 73 ) $ 32 $ 73 $ 753

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.

1 The increase in the AROs associated with coal ash disposal areas was primarily the result of incremental remedies required by EGLE for certain ash disposal ponds and incremental AROs recorded in response to reviews of legacy CCR impoundments.

2 The increase in AROs associated with water intake lines, which were previously immaterial, was primarily the result of changes in the expected scope of required capping following the finalization of decommissioning plans with the local jurisdiction.

Company and ARO Description ARO Liability 12/31/2023 Incurred Settled Accretion Cash Flow Revisions ARO Liability 12/31/2024

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CMS Energy and Consumers provide an employer contribution to the DCCP 401(k) plan for employees hired on or after July 1, 2003.

The contribution ranges from five percent to ten percent of base pay, depending on years of service and employee class.

The contribution ranges from 5 percent to 10 percent of base pay, depending on years of service and employee class.

Employees are not required to contribute in order to receive the plan’s employer contribution.

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On April 1, 2006, CMS Energy and Consumers implemented a DC SERP and froze further new participation in the DB SERP.

The DC SERP provides participants benefits ranging from five percent to 15 percent of total compensation.

The DC SERP provides participants benefits ranging from 5 percent to 15 percent of total compensation.

The DC SERP requires a minimum of five years of participation before vesting.

3 unchanged sentences

CMS Energy’s and Consumers’ DC SERP expense was $ 1 million for the years ended December 31, 2025, 2024, and 2023.

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 years ended December 31, 2024 and 2023, and $ 44 million for the year ended December 31, 2022.

The 401(k) plan employer match equals 4 to 6 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 $ 46 million for the year ended December 31, 2025, and $ 41 million for the years ended December 31, 2024 and 2023.

The total 401(k) plan cost for Consumers was $ 44 million for the year ended December 31, 2025, $ 39 million for the year ended December 31, 2024, and $ 40 million for the year ended December 31, 2023.

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.

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 ten 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 health-related OPEB Plan if hired before January 1, 2007 for non-union participants and hired before September 1, 2010 for union participants.

Retiree health care costs were based on the assumption that costs would increase 8.00 percent in 2026 and 8.50 percent in 2025 for those under 65 and would increase 9.75 percent in 2026 and 10.25 percent in 2025 for those over 65.

The rate of increase was assumed to decline to 4.75 percent by 2034 and thereafter for all retirees.

Presented in the following table are the weighted-average assumptions used in CMS Energy’s and Consumers’ retirement benefit plans to determine benefit obligations and net periodic benefit cost:

Presented in the following table are the weighted-average assumptions used in CMS Energy’s, including Consumers’, retirement benefit plans to determine benefit obligations and net periodic benefit cost:

December 31 2025 2024 2023

CMS Energy, including Consumers

Weighted average for benefit obligations 1

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DB Pension Plan A 3.70 3.60 3.60

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.

1 The mortality assumption for benefit obligations and 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 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.

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

this approach applies individual spot rates along the yield curve to future projected benefit payments based on the time of payment.

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

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

5 CMS Energy and Consumers determined the long-term rate of return using historical market returns, the present and expected future economic environment, the capital market principles of risk and return, and the expert opinions of individuals and firms with financial market knowledge.

CMS Energy and Consumers considered the asset allocation of the portfolio in forecasting the future expected total return of the portfolio.

The goal was to determine a long-term rate of return that could be incorporated into the planning of future cash flow requirements in conjunction with the change in the liability.

The goal was to determine a long-term rate of return that could be incorporated into the planning

of future cash flow requirements in conjunction with the change in the liability.

Annually, CMS Energy and Consumers review for reasonableness and appropriateness the forecasted returns for various classes of assets used to construct an expected return model.

CMS Energy’s and Consumers’ expected long-term rate of return on the assets of the DB Pension Plans was 7.30 percent in 2025.

The actual return (loss) on the assets of the DB Pension Plans was 3.6 percent in 2024, 12.6 percent in 2023, and ( 15.9 ) percent in 2022.

The actual return on the assets of the DB Pension Plans was 12.7 percent in 2025, 3.6 percent in 2024, and 12.6 percent in 2023.

Presented in the following table are the costs (credits) and other changes in plan assets and benefit obligations incurred in CMS Energy’s and Consumers’ retirement benefit plans:

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Interest cost 114 109 112 43 43 44

Settlement loss — — 1 — — —

Expected return on plan assets ( 229 ) ( 234 ) ( 220 ) ( 111 ) ( 115 ) ( 103 )

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

At December 31, 2025, CMS Energy, including Consumers, had deferred $ 3 million of pension costs and $ 6 million of OPEB credits under this mechanism related to 2025 expense.

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.

CMS Energy and Consumers amortize net gains and losses in excess of 10 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 seven years for the year ended December 31, 2025, and eight years for the years ended December 31, 2024 and 2023.

For DB Pension Plan B, the estimated period of amortization of gains and losses was 17 years for the years ended

December 31, 2025, 2024, and 2023.

For the OPEB Plan, the estimated amortization period was nine years for the years ended December 31, 2025, 2024, and 2023.

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Actuarial loss (gain) 53 1

( 4 ) 1 ( 40 ) 1

Benefits paid ( 158 ) ( 142 ) ( 10 ) ( 10 ) ( 54 ) ( 58 )

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Funded status $ ( 76 ) $ ( 76 ) $ 812 $ 678

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.

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.

1 The actuarial losses for 2025 for the DB Pension Plans and OPEB Plans were primarily the result of lower discount rates.

The actuarial gains for 2024 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 $ 1.0 billion at December 31, 2025 and $ 836 million at December 31, 2024.

Presented in the following table is the classification of CMS Energy’s and Consumers’ retirement benefit plans’ assets and liabilities:

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Net loss (gain) 57 60 ( 7 ) ( 3 )

Prior service cost (credit) — 1 ( 2 ) ( 2 )

Prior service credit — — ( 2 ) ( 2 )

Total amounts recognized in regulatory assets and AOCI $ 614 $ 725 $ 23 $ 77

5 unchanged sentences

Total amounts recognized in regulatory assets and AOCI $ 575 $ 680 $ 32 $ 82

Presented in the following tables are the fair values of the assets of CMS Energy’s DB Pension Plans and OPEB Plan, by asset category and by level within the fair value hierarchy.

Presented in the following tables are the fair values of the assets of CMS Energy’s, including Consumers’, DB Pension Plans and OPEB Plan, by asset category and by level within the fair value hierarchy.

For additional details regarding the fair value hierarchy, see Note 6, Fair Value Measurements.

2 unchanged sentences

Total Level 1 Level 2 Total Level 1 Level 2

CMS Energy, including Consumers

Cash and short-term investments $ 162 $ 162 $ — $ 148 $ 148 $ —

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Total Level 1 Level 2 Total Level 1 Level 2

CMS Energy, including Consumers

Cash and short-term investments $ 72 $ 72 $ — $ 35 $ 35 $ —

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At December 31, 2025, unions represented 44 percent of CMS Energy’s employees and 45 percent of Consumers’ employees.

The UWUA represents Consumers’ operating, maintenance, construction, and customer contact center employees.

The USW represents Zeeland plant employees.

The UWUA and USW agreements expire in 2025.

The UWUA represents Consumers’ and NorthStar Clean Energy’s operating, maintenance, construction employees and Consumers’ customer contact center employees.

The USW represents Consumers’ Zeeland plant employees.

Consumers’ union agreements expire in 2030 and the majority of NorthStar Clean Energy’s represented employees have an agreement that expires in 2029.

Stock-based Compensation

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Dividends on restricted stock units 4,085 3,913

Additional market-based shares based on achievement of condition 5,982 5,624

Additional performance-based shares based on achievement of condition 83,667 78,689

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The fair value of market-based restricted stock awards is calculated on the grant date using a Monte Carlo simulation.

CMS Energy and Consumers base expected volatilities on the historical volatility of the price of CMS Energy common stock.

free rate for valuation of the market-based restricted stock awards was based on the three ‑ year U.S.

CMS Energy and Consumers

base expected volatilities on the historical volatility of the price of CMS Energy common stock.

The risk ‑ free rate for valuation of the market-based restricted stock awards was based on the three ‑ year U.S.

Treasury yield at the award grant date.

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In Millions, Except Tax Rate

Amount Percent Amount Percent Amount Percent

Years Ended December 31 2025 2024 2023

3 unchanged sentences

Increase (decrease) in income taxes from:

State and local income taxes, net of federal effect 1

State and local income taxes, net of federal income tax effect 1

77 6.2 58 5.1 40 4.2

Renewable energy tax credits ( 68 ) ( 5.4 ) ( 71 ) ( 6.4 ) ( 55 ) ( 5.8 )

Other ( 6 ) ( 0.5 ) ( 6 ) ( 0.5 ) ( 7 ) ( 0.7 )

Nontaxable or nondeductible items 3 0.2 4 0.4 3 0.3

Changes in unrecognized tax benefits 9 0.7 2 0.2 ( 11 ) ( 1.2 )

Other adjustments

TCJA excess deferred taxes ( 42 ) ( 3.4 ) ( 43 ) ( 3.8 ) ( 40 ) ( 4.2 )

( 43 ) ( 40 ) ( 65 )

Deferred tax adjustment 2

— — ( 16 ) ( 1.4 ) — —

Taxes attributable to noncontrolling interests 15 1.2 12 1.1 17 1.8

Accelerated flow-through of regulatory tax benefits 3

Other, net ( 4 ) ( 0.3 ) — — — —

1 unchanged sentence

Effective tax rate 19.7 % 15.7 % 15.4 %

In Millions, Except Tax Rate

Amount Percent Amount Percent Amount Percent

Years Ended December 31 2025 2024 2023

Income from continuing operations before income taxes $ 1,417 $ 1,209 $ 1,028

1 unchanged sentence

Increase (decrease) in income taxes from:

State and local income taxes, net of federal effect 1

State and local income taxes, net of federal income tax effect 1

80 5.7 60 5.0 47 4.6

Renewable energy tax credits ( 46 ) ( 3.2 ) ( 51 ) ( 4.2 ) ( 43 ) ( 4.2 )

Other ( 6 ) ( 0.4 ) ( 6 ) ( 0.5 ) ( 7 ) ( 0.7 )

Nontaxable or nondeductible items 3 0.2 3 0.2 3 0.3

Changes in unrecognized tax benefits 9 0.6 1 0.1 ( 12 ) ( 1.2 )

Other adjustments

TCJA excess deferred taxes

1 unchanged sentence

Deferred tax adjustment 2

Accelerated flow-through of regulatory tax benefits 3

— — ( 16 ) ( 1.3 ) — —

Other, net ( 8 ) ( 0.6 ) ( 2 ) ( 0.2 ) ( 3 ) ( 0.2 )

1 unchanged sentence

Effective tax rate 20.3 % 16.5 % 15.7 %

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.

1 In June 2025, state deferred tax balances were increased by $ 12 million to reflect a change in Illinois tax policy that establishes nexus for Consumers.

The policy change is effective for tax years beginning January 1, 2026.

During 2023, 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, 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.

State Income Tax Claim:

In February 2025, CMS Energy received an adverse ruling from the Michigan Tax Tribunal in regards to the methodology of state apportionment for Consumers’ electricity sales to MISO.

In March 2025, CMS Energy filed an appeal with the Michigan Court of Appeals and a hearing was held in February 2026.

CMS Energy and Consumers have evaluated and concluded their uncertain tax positions associated with this matter to be sufficient as of December 31, 2025.

While CMS Energy and Consumers expect the appeal to prevail, if it were to fail, the companies would be required to revise the estimated value of their state deferred tax liabilities, which could result in a material impact to their results of operations.

Tax Legislation:

CMS Energy and Consumers are subject to changing tax laws.

In July 2025, President Trump signed into law the OBBBA.

The legislation allows for the immediate expensing of domestic research and development costs and includes changes to clean energy tax credits enacted by the Inflation Reduction Act of 2022.

While the OBBBA restores, and makes permanent, the 100‑percent

bonus depreciation deduction, it also retains a provision that allows utilities to take a full deduction of interest expense in lieu of 100‑percent bonus depreciation.

CMS Energy and Consumers evaluated the provisions of the OBBBA and concluded that the legislation is not expected to have a material impact on their respective financial statements.

This conclusion is subject to change as additional guidance or interpretations become available.

Renewable Energy Tax Credits:

4 unchanged sentences

During 2025, CMS Energy sold renewable energy tax credits generated in 2025 and received proceeds of $ 36 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.

CMS Energy also received proceeds of $ 13 million during 2025 from the 2024 sale of renewable energy tax credits, all of which was recognized at Consumers.

CMS Energy will receive an additional $ 32 million in 2026 from the renewable energy tax credits generated and sold in 2025, of which $ 10 million will be recognized at Consumers.

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

4 unchanged sentences

State and local 9 — 1

$ 43 $ 34 $ 6

Deferred income taxes

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State and local 33 7 2

$ 240 $ 85 $ 5

Deferred income taxes

4 unchanged sentences

Tax expense $ 288 $ 200 $ 161

Presented in the following table are income taxes paid:

Years Ended December 31 2025 2024 2023

CMS Energy, including Consumers

Federal $ 28 $ 27 $ 15

Total $ 29 $ 28 $ 15

Federal $ 189 $ 57 $ 23

Total $ 210 $ 57 $ 31

CMS Energy and Consumers are domiciled in the U.S.

and are not subject to taxes in any foreign jurisdiction.

State income taxes paid (net of refunds) are primarily attributable to the state of Michigan.

Presented in the following table are the principal components of deferred income tax assets (liabilities) recognized:

2 unchanged sentences

Deferred income tax assets

Tax loss and credit carryforwards $ 258 $ 428

Net regulatory tax liability $ 294 $ 307

Tax loss and credit carryforwards 139 258

Reserves and accruals 16 27

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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.

CMS Energy has provided a valuation allowance of $ 2 million for state and local tax loss carryforwards.

CMS Energy and Consumers expect to utilize fully their tax loss and credit carryforwards for which no valuation allowance has been provided.

6 unchanged sentences

Additions for prior-year tax positions 7 2 —

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

Reductions for lapse of statute of limitations ( 4 ) ( 5 ) ( 3 )

3 unchanged sentences

Additions for prior-year tax positions 7 1 2

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

Reductions for lapse of statute of limitations ( 4 ) ( 11 ) ( 3 )

2 unchanged sentences

One uncertain tax benefit relates to the methodology of state apportionment for Consumers’ electricity sales to MISO.

The Michigan Tax Tribunal heard oral arguments on this methodology during 2022.

A final conclusion is not anticipated in the next 12 months.

CMS Energy has filed an appeal on an adverse ruling received from the Michigan Tax Tribunal on this methodology and a hearing was held in February 2026.

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

2 unchanged sentences

CMS Energy’s federal income tax returns for 2022 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.

CMS Energy’s Michigan Corporate Income Tax returns for 2013 through 2016 and 2021 and subsequent years remain subject to examination by the State of Michigan.

CMS Energy’s and Consumers’ estimate of the potential outcome for any uncertain tax issue is highly judgmental.

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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 5, Financings and Capitalization.

Convertible Securities

In May 2023, CMS Energy issued convertible senior notes.

CMS Energy has 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.

Upon conversion, the convertible senior notes are required to be paid in cash with only amounts exceeding the principal permitted to be settled in shares.

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

Accordingly, the convertible senior notes were included in the computation of diluted EPS, but not in the computation of basic EPS.

The impact to diluted EPS was de minimis.

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

7 unchanged sentences

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

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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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CMS Energy and Consumers recorded uncollectible accounts expense of $ 40 million for the year ended December 31, 2025, $ 33 million for the year ended December 31, 2024, and $ 34 million for the year ended December 31, 2023.

Uncollectible accounts expense for the year ended December 31, 2022 included a commitment to contribute $ 10 million to directly assist vulnerable customers with utility bills.

Consumers’ customers are billed monthly in cycles having billing dates that do not generally coincide with the end of a calendar month.

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

Revenues to Be Refunded:

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

5 unchanged sentences

Interest income 37 50 37

Interest income – related parties 1 — —

Allowance for equity funds used during construction 23 29 7

73 unchanged sentences

498 3,970 — 3,970

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

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

2 Includes income from equity method investees of $ 5 million attributable to NorthStar Clean Energy.

See Note 16, Other Income and Other Expense

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

3 Other segment items comprise 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.

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Income (Loss) Before Income Taxes 870 548 1,418 ( 1 ) 1,417

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

Income tax expense 150 138 288 — 288

Net Income (Loss) 720 410 1,130 ( 1 ) 1,129

8 unchanged sentences

3,472 — 3,472

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.

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

2 Other segment items comprise preferred stock dividends.

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

29 unchanged sentences

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.

1 Power supply costs comprise 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 16, 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.

3 Other segment items comprise 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.

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

Net Income 551 316 867 — 867

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

Other segment items 2

( 1 ) ( 1 ) ( 2 ) — ( 2 )

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

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

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

4 unchanged sentences

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.

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

2 Other segment items comprise preferred stock dividends.

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

13 unchanged sentences

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

Other income (expense) 2

Other income 2

131 77 12 220 142 362

6 unchanged sentences

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

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

1 Power supply costs comprise 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 16, 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.

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

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

13 unchanged sentences

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

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

Net Income 551 316 867 — 867

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.

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

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

2 Other segment items comprise preferred stock dividends.

Related-party Transactions—Consumers

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• payments of principal and interest when due to CMS Energy related to borrowings under certain credit agreements and CMS Energy’s repurchase of Consumers’ first mortgage bonds

Transactions involving power supply purchases from certain affiliates of NorthStar Clean Energy are based on avoided costs under PURPA, state law, and competitive bidding.

Transactions involving power supply purchases from certain affiliates of NorthStar Clean Energy are based on state law and competitive bidding.

The payment of parent company overhead costs is based on the use of accepted industry allocation methodologies.

These payments are for costs that occur in the normal course of business.

Presented in the following table is Consumers’ expense recorded from related-party transactions for the years ended December 31:

Description Related Party 2024 2023 2022

Purchases of capacity and energy Affiliates of NorthStar Clean Energy $ 71 $ 75 $ 76

Purchases of power and capacity from affiliates of NorthStar Clean Energy totaled $ 94 million in 2025, $ 71 million in 2024, and $ 75 million in 2023.

Amounts payable to related parties for purchased power and other services were $ 19 million at December 31, 2025 and $ 20 million at December 31, 2024.

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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.

Interest payable to related parties wa s $ 9 million at December 31, 2025 and $ 7 million at December 31, 2024.

For more information about these repurchases, see Note 5, Financings and Capitalization—CMS Energy’s Purchase of Consumers’ First Mortgage Bonds.

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Consolidated VIEs:

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

In March 2025, NorthStar Clean Energy sold a 50 ‑percent interest in NWO Wind Equity Holdings for net proceeds of $ 36 million.

NWO Wind Equity Holdings holds the Class B membership interest in NWO Holdco, the holding company of a 100 ‑MW wind project located in Paulding County, Ohio.

Additionally in March 2025, NorthStar Clean Energy sold a 50 ‑percent interest in Delta Solar Equity Holdings for net proceeds of $ 8 million.

Delta Solar Equity Holdings is the holding company of a 24 ‑MW solar project located in Delta Township, Michigan.

In December 2025, NorthStar Clean Energy sold a Class A membership interest in BG Solar Holdings to a tax equity investor.

BG Solar Holdings is the holding company of a 200 ‑MW solar generation project being constructed in Branch County, Michigan.

All of the project’s nameplate capacity has been committed under a 15 ‑year renewable energy purchase agreement.

The tax equity investor contributed $ 15 million and recognized a deemed contribution of $ 35 million associated with BG Solar Holdings’ sale of investment tax credits related to a portion of the project placed into service for tax purposes in 2025.

The tax equity investor will contribute additional amounts upon commercial operation of the project in 2026.

NorthStar Clean Energy consolidates these and other 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.

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

BG Solar Holdings Class B membership interest 2

Holding company of a 200 -MW solar generation project in Branch County, Michigan

Delta Solar Equity Holdings 50 -percent ownership interest 1

Holding company of a 24 -MW solar generation project in Delta Township, Michigan

Newport Solar Holdings Class B membership interest 2

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

NWO Wind Equity Holdings 50 ‑percent ownership interest 1

Holds a Class B membership interest in NWO Holdco

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.

1 The remaining ownership 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;

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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Cash and cash equivalents $ 20 $ 18

Restricted cash 19 —

Accounts receivable 42 4

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Plant, property, and equipment, net 1,037 1,024

Construction work in progress 357 —

Other non-current assets 5 3

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$ 1,485 $ 1,052

Current portion of long-term debt and finance leases $ 65 $ —

Accounts payable 29 8

Long-term debt 118 —

Non-current portion of finance leases 39 23

Asset retirement obligations 33 32

Other non-current liabilities 3 —

Total liabilities $ 292 $ 64

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Consumers is the primary beneficiary of and consolidates these VIEs, 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.

The VIEs’ primary assets and liabilities comprise regulatory assets and long-term debt.

For more information on these assets and liabilities, see Note 2, Regulatory Matters—Securitized Costs and Note 4, Financings and Capitalization—Securitization Bonds.

The VIEs’ primary assets and liabilities comprise non-current regulatory assets and long-term debt.

For more information on

these assets and liabilities, see Note 3, Regulatory Matters—Securitized Costs and Note 5, Financings and Capitalization—Securitization Bonds

Non-consolidated VIEs:

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

Presented in the following table is information about these partnerships:

Presented in the following table is information about these partnerships, which are accounted for using the equity method:

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

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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.

Campbell Retirement:

Under its integrated resource plan, Consumers had planned to retire J.H.

Campbell in 2025.

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

Campbell retention incentive program was $ 43 million.

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:

Campbell through the planned retirement, Consumers implemented a retention incentive program.

Consumers made final payments under this retention plan in November 2025.

The aggregate cost of this program was $ 48 million, which has been deferred as a regulatory asset.

The MPSC has approved recovery of these retention costs over three years .

The retirement of J.H.

Campbell is subject to temporary extensions under emergency orders issued by the U.S.

Secretary of Energy.

As a result, Consumers has implemented retention measures to ensure appropriate staffing levels and expects to incur up to $ 4 million during each 90‑day emergency order period.

Consumers will seek recovery of these retention costs from FERC, consistent with rate recovery sought for other costs of complying with the emergency orders.

For additional information on the emergency orders associated with J.H.

Campbell, see Note 3, Regulatory Matters.

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

Year Ended December 31 2025 2024

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Retention benefit liability at the end of the period

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.

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.

Sale of Hydroelectric Facilities:

In September 2025, Consumers signed an agreement to sell its 13 river hydroelectric dams, which are located throughout Michigan, to a non-affiliated company.

Additionally, Consumers signed an agreement to purchase power generated by the facilities for 30 years, at a price that reflects the counterparty’s acceptance of the risks and rewards of ownership of the facilities, including FERC licensing obligations.

The agreements are contingent upon MPSC and FERC approval, for which Consumers filed in October 2025.

Timing of the regulatory review process is uncertain and could extend 12 to 18 months or longer.

In Consumers’ most recent electric rate case, the MPSC approved deferred accounting treatment for costs of owning and operating the hydroelectric dams pending and until completion of the transaction.

At December 31, 2025, the net book value of the hydroelectric facilities was immaterial.

To ensure necessary staffing at the hydroelectric facilities through the anticipated sale, Consumers has provided current employees at the facilities with a retention incentive program.

Subsequently, to ensure continued safe operation of the facilities after the sale, the buyer will offer employment to the current hydroelectric employees for a period of at least a year.

The retention incentive benefits are contingent upon MPSC and FERC approval of the sale transaction.

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Report of Independent Registered Public Accounting Firm

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Under regulatory accounting, the Company records regulatory assets or liabilities for certain transactions that would have been treated as expense or revenue by a non ‑ regulated business.

As of December 31, 2024, the Company has recognized a total of $3,798 million of regulatory assets, $4,178 million of regulatory liabilities, and $38 million of accrued rate refunds.

As of December 31, 2025 the Company has recognized a total of $3,459 million of regulatory assets, $4,176 million of regulatory liabilities, $38 million of accrued revenues, and $28 million of accrued rate refunds.

As described by management, there are multiple participants to rate case proceedings who often challenge various aspects of those proceedings, including the prudence of the Company’s policies and practices.

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Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s assessment of

regulatory proceedings, including the probability of recovering incurred costs and the related accounting and disclosure impacts.

These procedures included testing the effectiveness of controls relating to

management’s assessment of regulatory proceedings, including the probability of recovering incurred costs and the related accounting and disclosure impacts.

These procedures also included, among others, (i) evaluating the Company’s correspondence with regulators;

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholder of Consumers Energy Company

To the Board of Directors and Stockholders of Consumers Energy Company

Opinions on the Financial Statements and Internal Control over Financial Reporting

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Under regulatory accounting, the Company records regulatory assets or liabilities for certain transactions that would have been treated as expense or revenue by a non ‑ regulated business.

As of December 31, 2024, the Company has recognized a total of $3,798 million of regulatory assets, $4,178 million of regulatory liabilities, and $38 million of accrued rate refunds.

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Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s assessment of

regulatory proceedings, including the probability of recovering incurred costs and the related accounting and disclosure impacts.

These procedures included testing the effectiveness of controls relating to

management’s assessment of regulatory proceedings, including the probability of recovering incurred costs and the related accounting and disclosure impacts.

These procedures also included, among others, (i) evaluating the Company’s correspondence with regulators;

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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