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What changed in CMS Energy's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CMS Energy's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+397 added−368 removedSource: 10-K (2026-02-10) vs 10-K (2025-02-11)

Top changes in CMS Energy's 2025 10-K

397 paragraphs added · 368 removed · 291 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

79 edited+24 added−13 removed37 unchanged
Biggest changeEnergy Legislation In November 2023, Michigan enacted the 2023 Energy Law, which among other things: • raised the renewable energy standard from the present 15 ‑ percent requirement to 50 percent by 2030 and 60 percent by 2035; renewable energy generated anywhere within MISO can be applied to meeting this standard, with certain limitations • set a clean energy standard of 80 percent by 2035 and 100 percent by 2040; low- or zero-carbon emitting resources, such as nuclear generation and natural gas generation coupled with carbon capture, are considered clean energy sources under this standard • authorized the MPSC to grant extensions of the clean energy or renewable energy standards deadlines if compliance is not practically feasible, would be excessively costly to customers, or would cause reliability issues • increased the energy waste reduction requirement for electric utilities to achieve annual reductions in customers’ electricity use from the present one‑percent reduction requirement to 1.5 percent beginning in 2026; beyond this requirement, the law set a goal of a two‑percent reduction and required that such goal be incorporated in an electric utility’s integrated resource plan modeling scenarios • increased the energy waste reduction requirement for gas utilities to achieve annual reductions in customers’ gas use from the present 0.75‑percent reduction requirement to 0.875 percent beginning in 2026 • enhanced existing incentives for energy efficiency programs and returns earned on new clean or renewable PPAs • created a new energy storage standard that requires electric utilities to file plans by 2029 to obtain new energy storage that will contribute to a Michigan target of 2,500 MW based on their pro rata share • expanded the statutory cap on distributed generation resources to ten percent • expanded the MPSC’s scope of considerations in integrated resource plans to include affordability, greenhouse gas emissions, environmental justice considerations, the effects on human health, and other environmental concerns • provided the MPSC siting authority over large renewable energy projects Consumers filed updates to its renewable energy plan in November 2024 and plans to file updates to its Clean Energy Plan in 2026.
Biggest changeEnergy Legislation In 2023, Michigan enacted the 2023 Energy Law, which among other things: • increased the renewable energy standard from 15 percent to 50 percent by 2030 and 60 percent by 2035; renewable energy generated anywhere within MISO can be applied to meeting this standard, with certain limitations • established a clean energy standard of 80 percent by 2035 and 100 percent by 2040; low- or zero‑carbon emitting resources, such as nuclear generation and natural gas generation coupled with carbon capture, qualify as clean energy sources under this standard • authorized the MPSC to grant extensions of the clean energy or renewable energy standards deadlines if compliance is not practically feasible, would be excessively costly to customers, or would cause reliability issues • increased the energy waste reduction requirement for electric utilities to achieve annual reductions in customers’ electricity use from the present 1‑percent reduction requirement to 1.5 percent beginning in 2026; beyond this requirement, the law set a goal of a 2‑percent reduction and required that such goal be incorporated in an electric utility’s integrated resource plan modeling scenarios • increased the energy waste reduction requirement for gas utilities to achieve annual reductions in customers’ gas use from the present 0.75‑percent reduction requirement to 0.875 percent beginning in 2026 • enhanced existing incentives for energy efficiency programs and returns earned on new clean or renewable PPAs • created a new energy storage standard, requiring electric utilities to file plans by 2029 to help achieve a statewide target of 2,500 MW • expanded the statutory cap on distributed generation resources to 10 percent of the electric utility’s five‑year average peak load • expanded the MPSC’s scope of considerations in integrated resource plans to include affordability, greenhouse gas emissions, environmental justice considerations, the effects on human health, and other environmental concerns • provided the MPSC siting authority over large renewable energy projects 31 Table of Contents Consumers’ updates to its Renewable Energy Plan, which were approved by the MPSC in September 2025, and planned updates to its integrated resource plan in 2026 will serve as a blueprint to meeting the requirements of the 2023 Energy Law by focusing on increasing the generation of renewable energy, deploying energy storage, helping customers use less energy, and offering demand response programs to reduce demand during critical peak times.
To address some of the requirements of these rules, Consumers has converted all of its fly ash handling systems to dry systems. In addition, Consumers’ ash facilities have programs designed to protect the environment and are subject to quarterly EGLE inspections.
To address some of the requirements of these rules, Consumers has converted all of its fly ash handling systems to dry conveyance systems. In addition, Consumers’ ash facilities have programs designed to protect the environment and are subject to quarterly EGLE inspections.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Overview and Outlook—Consumers Electric Utility Outlook and Uncertainties. 21 Table of Contents Presented in the following table are details about Consumers’ 2024 electric generation and supply mix: Name and Location (Michigan) Number of Units and Year Entered Service 2024 Generation Capacity (MW) 1 2024 Electric Supply (GWh) Coal steam generation J.H.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Overview and Outlook—Consumers Electric Utility Outlook and Uncertainties. 21 Table of Contents Presented in the following table are details about Consumers’ 2025 electric generation and supply mix: Name and Location (Michigan) Number of Units and Year Entered Service 2025 Generation Capacity (MW) 1 2025 Electric Supply (GWh) Coal steam generation J.H.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Contingencies and Commitments. Costs related to the construction, operation, corrective action, and closure of solid waste disposal facilities for coal ash are significant. Consumers’ coal ash disposal areas are regulated under Michigan’s solid waste rules and by the EPA’s rules regulating CCRs.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 4, Contingencies and Commitments. Costs related to the construction, operation, corrective action, and closure of solid waste disposal facilities for coal ash are significant. Consumers’ coal ash disposal areas are regulated under Michigan’s solid waste rules and by the EPA’s rules regulating CCRs.
Consumers addresses this competition in various ways, including: • aggressively controlling operating, maintenance, power supply, and fuel costs and passing savings on to customers • providing renewable energy options and energy waste reduction programs • providing competitive rate-design options, particularly for large energy-intensive customers • offering tariff-based incentives that support economic development • monitoring activity in adjacent geographical areas 25 Table of Contents Consumers Gas Utility Gas Utility Operations: Consumers’ gas utility operations, which include the purchase, transmission, storage, distribution, and sale of natural gas, generated operating revenue of $2.1 billion in 2024, $2.4 billion in 2023, and $2.7 billion in 2022.
Consumers addresses this competition in various ways, including: • aggressively controlling operating, maintenance, power supply, and fuel costs and passing savings on to customers • providing renewable energy options and energy waste reduction programs • providing competitive rate-design options, particularly for large energy-intensive customers • offering tariff-based incentives that support economic development • monitoring activity in adjacent geographical areas 25 Table of Contents Consumers Gas Utility Gas Utility Operations: Consumers’ gas utility operations, which include the purchase, transmission, storage, distribution, and sale of natural gas, generated operating revenue of $2.5 billion in 2025, $2.1 billion in 2024, and $2.4 billion in 2023.
Competition comes from GCC and transportation programs; system bypass opportunities for new and existing customers; and from alternative fuels and energy sources, such as propane, oil, and electricity. 28 Table of Contents NorthStar Clean Energy—Non-utility Operations and Investments NorthStar Clean Energy, through various subsidiaries and certain equity investments, is engaged in domestic independent power production, including the development and operation of renewable generation, and the marketing of independent power production.
Competition comes from GCC and transportation programs; system bypass by new and existing customers; and from alternative fuels and energy sources, such as propane, oil, and electricity. 28 Table of Contents NorthStar Clean Energy—Non-utility Operations and Investments NorthStar Clean Energy, through various subsidiaries and certain equity investments, is engaged in domestic independent power production, including the development and operation of renewable generation, and the marketing of independent power production.
MPSC Consumers is subject to the jurisdiction of the MPSC, which regulates public utilities in Michigan with respect to retail utility rates, accounting, utility services, certain facilities, certain asset transfers, corporate mergers, and other matters. The Michigan Attorney General, ABATE, the MPSC Staff, residential customer advocacy groups, environmental organizations, and certain other parties typically participate in MPSC proceedings concerning Consumers.
MPSC Consumers is subject to the jurisdiction of the MPSC, which regulates public utilities in Michigan with respect to retail utility rates, accounting, utility services, certain facilities, certain asset transfers, corporate mergers, and other matters. 30 Table of Contents 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.
McIntosh (age 49) CMS Energy Vice President, Controller, and CAO 9/2021 – Present Vice President and Controller 6/2021 – 9/2021 Vice President 9/2015 – 6/2021 Consumers Vice President, Controller, and CAO 9/2021 – Present Vice President and Controller 6/2021 – 9/2021 Vice President 9/2015 – 6/2021 NorthStar Clean Energy Vice President, CAO, and Director 6/2024 – Present Vice President, Controller, and CAO 9/2021 – 6/2024 Vice President and Controller 6/2021 – 9/2021 Vice President 9/2015 – 6/2021 There are no family relationships among executive officers and directors of CMS Energy or Consumers.
McIntosh (age 50) CMS Energy Vice President, Controller, and CAO 9/2021 – Present Vice President and Controller 6/2021 – 9/2021 Vice President 9/2015 – 6/2021 Consumers Vice President, Controller, and CAO 9/2021 – Present Vice President and Controller 6/2021 – 9/2021 Vice President 9/2015 – 6/2021 NorthStar Clean Energy Vice President, CAO, and Director 6/2024 – Present Vice President, Controller, and CAO 9/2021 – 6/2024 Vice President and Controller 6/2021 – 9/2021 Vice President 9/2015 – 6/2021 There are no family relationships among executive officers and directors of CMS Energy or Consumers.
As CMS Energy or Consumers renews its policies, it is possible that some of the present insurance coverage may not be renewed or obtainable on commercially reasonable terms due to restrictive insurance markets. Human Capital CMS Energy and Consumers employ a highly trained and skilled workforce comprised of union and non‑union employees.
As CMS Energy or Consumers renews its policies, it is possible that some of the present insurance coverage may not be renewed or obtainable on commercially reasonable terms due to restrictive insurance markets. 33 Table of Contents Human Capital CMS Energy and Consumers employ a highly trained and skilled workforce comprised of union and non‑union employees.
For additional information on Consumers’ properties, see Business Segments—Consumers Electric Utility—Electric Utility Properties and Consumers Gas Utility—Gas Utility Properties. 17 Table of Contents In 2024, Consumers served 1.9 million electric customers and 1.8 million gas customers in Michigan’s Lower Peninsula.
For additional information on Consumers’ properties, see Business Segments—Consumers Electric Utility—Electric Utility Properties and Consumers Gas Utility—Gas Utility Properties. 17 Table of Contents In 2025, Consumers served 1.9 million electric customers and 1.8 million gas customers in Michigan’s Lower Peninsula.
Consumers’ electric utility customer base consists of a mix of primarily residential, commercial, and diversified industrial customers in Michigan’s Lower Peninsula. 18 Table of Contents Presented in the following illustration is Consumers’ 2024 electric utility operating revenue of $5.1 billion by customer class: Consumers’ electric utility operations are not dependent on a single customer, or even a few customers, and the loss of any one or even a few of Consumers’ largest customers is not reasonably likely to have a material adverse effect on Consumers’ financial condition.
Consumers’ electric utility customer base consists of a mix of primarily residential, commercial, and diversified industrial customers in Michigan’s Lower Peninsula. 18 Table of Contents Presented in the following illustration is Consumers’ 2025 electric utility operating revenue of $5.6 billion by customer class: Consumers’ electric utility operations are not dependent on a single customer, or even a few customers, and the loss of any one or even a few of Consumers’ largest customers is not reasonably likely to have a material adverse effect on Consumers’ financial condition.
Campbell 3 unit, net of the 6.69‑percent ownership interest of the Michigan Public Power Agency and Wolverine Power Supply Cooperative, Inc, each a non ‑ affiliated company. 4 Represents Consumers’ 51‑percent share of the capacity of Ludington. DTE Electric holds the remaining 49‑percent ownership interest. 5 Represents Consumers’ share of net pumped-storage generation.
Campbell 3 unit, net of the 6.69‑percent ownership interest of the Michigan Public Power Agency and Wolverine Power, each a non‑affiliated company. 4 Represents Consumers’ 51‑percent share of the capacity of Ludington. DTE Electric holds the remaining 49‑percent ownership interest. 5 Represents Consumers’ share of net pumped-storage generation.
The needs of this market are driven by current electric demand and available generation, as well as projections of future electric demand and available generation. 29 Table of Contents CMS Energy and Consumers Regulation CMS Energy, Consumers, and their subsidiaries are subject to regulation by various federal, state, and local governmental agencies, including those described in the following sections.
The needs of this market are driven by current electric demand and available generation, as well as projections of future electric demand and available generation. CMS Energy and Consumers Regulation CMS Energy, Consumers, and their subsidiaries are subject to regulation by various federal, state, and local governmental agencies, including those described in the following sections.
CMS Energy’s consolidated operating revenue was $7.5 billion in 2024 and 2023, and $8.6 billion in 2022. For further information about operating revenue, income, and assets and liabilities attributable to all of CMS Energy’s business segments and operations, see Item 8. Financial Statements and Supplementary Data—CMS Energy Consolidated Financial Statements and Notes to the Consolidated Financial Statements.
CMS Energy’s consolidated operating revenue was $8.5 billion in 2025, and $7.5 billion in 2024 and 2023. For further information about operating revenue, income, and assets and liabilities attributable to all of CMS Energy’s business segments and operations, see Item 8. Financial Statements and Supplementary Data—CMS Energy Consolidated Financial Statements and Notes to the Consolidated Financial Statements.
Consumers’ rates and certain other aspects of its business are subject to the jurisdiction of the MPSC and FERC, as well as to NERC reliability standards, as described in CMS Energy and Consumers Regulation. Consumers’ consolidated operating revenue was $7.2 billion in 2024 and 2023, and $8.2 billion in 2022.
Consumers’ rates and certain other aspects of its business are subject to the jurisdiction of the MPSC and FERC, as well as to NERC reliability standards, as described in CMS Energy and Consumers Regulation. Consumers’ consolidated operating revenue was $8.1 billion in 2025, and $7.2 billion in 2024 and 2023.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Overview. Business Segments Consumers Electric Utility Electric Utility Operations: Consumers’ electric utility operations, which include the generation, purchase, distribution, and sale of electricity, generated operating revenue of $5.1 billion in 2024, $4.7 billion in 2023, and $5.4 billion in 2022.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Overview. Business Segments Consumers Electric Utility Electric Utility Operations: Consumers’ electric utility operations, which include the generation, purchase, distribution, and sale of electricity, generated operating revenue of $5.6 billion in 2025, $5.1 billion in 2024, and $4.7 billion in 2023.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Contingencies and Commitments. CMS Energy has recorded a $48 million liability for its subsidiaries’ obligations associated with Bay Harbor and Consumers has recorded a $60 million liability for its obligations at a number of former MGP sites. For additional information, see Item 1A. Risk Factors and Item 8.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 4, Contingencies and Commitments. CMS Energy has recorded a $48 million liability for its subsidiaries’ obligations associated with Bay Harbor and Consumers has recorded a $59 million liability for its obligations at a number of former MGP sites. For additional information, see Item 1A. Risk Factors and Item 8.
Presented in the following illustration is Consumers’ 2024 gas utility operating revenue of $2.1 billion by customer class: Consumers’ gas utility operations are not dependent on a single customer, or even a few customers, and the loss of any one or even a few of Consumers’ largest customers is not reasonably likely to have a material adverse effect on Consumers’ financial condition.
Presented in the following illustration is Consumers’ 2025 gas utility operating revenue of $2.5 billion by customer class: Consumers’ gas utility operations are not dependent on a single customer, or even a few customers, and the loss of any one or even a few of Consumers’ largest customers is not reasonably likely to have a material adverse effect on Consumers’ financial condition.
For more information on the potential impacts of government regulation affecting CMS Energy, Consumers, and their subsidiaries, see Item 1A. Risk Factors, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook, and Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2, Regulatory Matters.
For more information on the potential impacts of government regulation and rate proceedings affecting CMS Energy, Consumers, and their subsidiaries, see Item 1A. Risk Factors, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook, and Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Regulatory Matters.
Consumers’ firm gas transportation contracts expire on various dates through 2028 with planned contract volumes providing 36 percent of Consumers’ total forecasted gas supply requirements for 2025. Consumers purchases the balance of its required gas supply under firm city-gate contracts and through authorized suppliers under the GCC program.
Consumers’ firm gas transportation contracts expire on various dates through 2028 with planned contract volumes providing 34 percent of Consumers’ total forecasted gas supply requirements for 2026. Consumers purchases the balance of its required gas supply under firm city-gate contracts and through authorized suppliers under the GCC program.
Michigan law allows electric customers in Consumers’ service territory to buy electric generation service from alternative electric suppliers in an aggregate amount capped at ten percent of Consumers’ sales, with certain exceptions. At December 31, 2024, electric deliveries under the ROA program were at the ten‑percent limit.
Michigan law allows electric customers in Consumers’ service territory to buy electric generation service from alternative electric suppliers in an aggregate amount capped at 10 percent of Consumers’ sales, with certain exceptions. At December 31, 2025, electric deliveries under the ROA program were at the 10‑percent limit.
The following table presents the composition of CMS Energy’s and Consumers’ workforce: December 31, 2024 CMS Energy, including Consumers Consumers Percent female employees 26 % 26 % Percent racially or ethnically diverse employees 14 14 Percent employees with disabilities 5 5 Percent veteran employees 10 10 Co ‑ workers are also empowered to engage in business employee resource groups and events that encourage candid conversations around diversity, equity, and inclusion.
The following table presents the composition of CMS Energy’s and Consumers’ workforce: December 31, 2025 CMS Energy, including Consumers Consumers Percent female employees 26 % 26 % Percent racially or ethnically diverse employees 13 13 Percent employees with disabilities 5 5 Percent veteran employees 10 10 35 Table of Contents Co ‑ workers are also empowered to engage in business employee resource groups and events that encourage candid conversations around diversity, equity, and inclusion.
The consumption of electric energy typically increases in the summer months, due primarily to the use of air conditioners and other cooling equipment. 19 Table of Contents Presented in the following illustration are Consumers’ monthly weather-normalized electric deliveries (deliveries adjusted to reflect normal weather conditions) to its customers, including ROA deliveries, during 2024 and 2023: Consumers’ 2024 summer peak demand was 8,030 MW, which included ROA demand of 603 MW.
The consumption of electric energy typically increases in the summer months, due primarily to the use of air conditioners and other cooling equipment. 19 Table of Contents Presented in the following illustration are Consumers’ monthly weather-normalized electric deliveries (deliveries adjusted to reflect normal weather conditions) to its customers, including ROA deliveries, during 2025 and 2024: Consumers’ 2025 summer peak demand was 8,500 MW, which included ROA demand of 552 MW.
For the 2023-2024 winter season, Consumers’ peak demand was 5,594 MW, which included ROA demand of 410 MW. As required by MISO reserve margin requirements, Consumers owns or controls, through long-term PPAs, short-term capacity purchases, and auction capacity purchases, all of the capacity required to supply its projected firm peak load and necessary reserve margin for summer 2025.
For the 2024‑2025 winter season, Consumers’ peak demand was 5,755 MW, which included ROA demand of 449 MW. As required by MISO reserve margin requirements, Consumers owns or controls, through long‑term PPAs, short-term capacity purchases, and auction capacity purchases, all of the capacity required to supply its projected firm peak load and necessary reserve margin for summer 2026.
In 2024, deliveries of natural gas through Consumers’ pipeline and distribution network, including off-system transportation deliveries, totaled 362 Bcf, which included GCC deliveries of 27 Bcf. In 2023, deliveries of natural gas through Consumers’ pipeline and distribution network, including off-system transportation deliveries, totaled 375 Bcf, which included GCC deliveries of 31 Bcf. Consumers’ gas utility operations are seasonal.
In 2025, deliveries of natural gas through Consumers’ pipeline and distribution network, including off‑system transportation deliveries, totaled 396 Bcf, which included GCC deliveries of 31 Bcf. In 2024, deliveries of natural gas through Consumers’ pipeline and distribution network, including off-system transportation deliveries, totaled 362 Bcf, which included GCC deliveries of 27 Bcf. Consumers’ gas utility operations are seasonal.
Hayes (age 50) CMS Energy Executive Vice President and CFO 5/2017 – Present Consumers Executive Vice President and CFO 5/2017 – Present NorthStar Clean Energy Executive Vice President, CFO, and Director 5/2017 – 6/2024 EnerBank Chairman of the Board and Director 10/2018 – 10/2021 Tonya L.
Hayes (age 51) CMS Energy Executive Vice President and CFO 5/2017 – Present Consumers Executive Vice President and CFO 5/2017 – Present NorthStar Clean Energy Chairman of the Board and Director 7/2025 – Present Executive Vice President, CFO, and Director 5/2017 – 6/2024 EnerBank Chairman of the Board and Director 10/2018 – 10/2021 Tonya L.
Consumers Consumers has served Michigan customers since 1886. Consumers was incorporated in Maine in 1910 and became a Michigan corporation in 1968. Consumers owns and operates electric generation and distribution facilities and gas transmission, storage, and distribution facilities. It provides electricity and/or natural gas to 6.8 million of Michigan’s 10 million residents.
Consumers Consumers has served Michigan customers since 1886. Consumers was incorporated in Maine in 1910 and became a Michigan corporation in 1968. Consumers owns and operates electric generation and distribution facilities and gas transmission, storage, and distribution facilities. It provides electricity and/or natural gas to 6.8 million of Michiga n’s 10 million r esidents.
To measure progress toward a breakthrough employee experience, CMS Energy and Consumers assess engagement, empowerment, and diversity, equity, and inclusion efforts using the companies’ culture index.
To measure progress toward a breakthrough employee experience, CMS Energy and Consumers assess engagement, empowerment, and 34 Table of Contents diversity, equity, and inclusion efforts using the companies’ culture index.
The list of directors and their biographies will be included in CMS Energy’s and Consumers’ definitive proxy statement for their 2025 Annual Meetings of Shareholders to be held May 2, 2025.
The list of directors and their biographies will be included in CMS Energy’s and Consumers’ definitive proxy statement for their 2026 Annual Meetings of Shareholders to be held May 8, 2026.
The term of office of each of the executive officers extends to the first meeting of the Board after the next annual election of Directors of CMS Energy and Consumers (to be held on May 2, 2025). 37 Table of Contents Available Information CMS Energy’s internet address is www.cmsenergy.com.
The term of office of each of the executive officers extends to the first meeting of the Board after the next annual election of Directors of CMS Energy and Consumers (to be held on May 8, 2026). 38 Table of Contents Available Information CMS Energy’s internet address is www.cmsenergy.com.
For the year ended December 31, 2024, the companies attained scores of: ◦ 72 percent positive sentiment for engagement, up 11 percentage points from 2023 ◦ 65 percent positive sentiment for empowerment, up 17 percentage points from 2023 ◦ 73 percent positive sentiment for diversity, equity, and inclusion, up eight percentage points from 2023 CMS Energy and Consumers aim to continuously improve these scores every year. • Building Skill Sets at Scale: With an overarching goal of ensuring co-workers have the right skills to succeed, CMS Energy and Consumers measure progress in this area through achievement of workforce planning and hiring milestones and through a first-time skill attainment index to evaluate the effectiveness of training.
For the year ended December 31, 2025, the companies attained scores of: ◦ 75‑percent positive sentiment for engagement, up 3 percentage points from 2024 ◦ 65‑percent positive sentiment for empowerment, no change from 2024 ◦ 75‑percent positive sentiment for diversity, equity, and inclusion, up 2 percentage points from 2024 CMS Energy and Consumers aim to continuously improve these scores every year. • Building Skill Sets at Scale: With an overarching goal of ensuring co-workers have the right skills to succeed, CMS Energy and Consumers measure progress in this area through achievement of workforce planning and hiring milestones and through a first-time skill attainment index to evaluate the effectiveness of training.
There are seven business employee resource groups available to all co ‑ workers; these groups are: • Women in Energy, working toward an inclusive place for all women in the fields they have chosen, from front line to management • the Minority Advisory Panel, promoting a culture of diversity and inclusion among all racial and ethnic minorities through education, leadership, development, and networking • the Veterans Advisory Panel, supporting former and active military personnel and assisting in recruiting and retaining veterans through career development • Genergy, a multigenerational group designed to bridge the gap of learning, networking, and mentoring across the generations of the workforce • the Pride Alliance of Consumers Energy, promoting an inclusive environment that is safe, supportive, and respectful for lesbian, gay, bi-sexual, and transgender persons and allies • Capable, aimed at removing barriers and creating pathways to meaningful work for co-workers of all abilities • Interfaith, a space for co ‑ workers of all backgrounds to gather and celebrate their unique beliefs, creating an environment of understanding and respect for all faiths, religions, and spiritual beliefs, including those with no faith affiliation 35 Table of Contents Information About CMS Energy’s and Consumers’ Executive Officers Presented in the following table are the company positions held during the last five years for each of CMS Energy’s and Consumers’ executive officers as of February 11, 2025: Name, Age, Position(s) Period Garrick J.
There are eight business employee resource groups available to all co ‑ workers; these groups are: • Women in Energy, working toward an inclusive place for all women in the fields they have chosen, from front line to management • the Minority Advisory Panel, promoting a culture of diversity and inclusion among all racial and ethnic minorities through education, leadership, development, and networking • the Veterans Advisory Panel, supporting former and active military personnel and assisting in recruiting and retaining veterans through career development • Genergy, a multigenerational group designed to bridge the gap of learning, networking, and mentoring across the generations of the workforce • the Pride Alliance of CMS Energy, promoting an inclusive environment that is safe, supportive, and respectful for lesbian, gay, bi-sexual, and transgender persons and allies • Capable, aimed at removing barriers and creating pathways to meaningful work for co-workers of all abilities • Interfaith, a space for co ‑ workers of all backgrounds to gather and celebrate their unique beliefs, creating an environment of understanding and respect for all faiths, religions, and spiritual beliefs, including those with no faith affiliation • People and Planet Partners, empowering co-workers to drive social benefits for customers and communities and advance environmental improvements, reduce the companies’ environmental footprint, and support the companies’ planet goals 36 Table of Contents Information About CMS Energy’s and Consumers’ Executive Officers Presented in the following table are the company positions held during the last five years for each of CMS Energy’s and Consumers’ executive officers as of February 10, 2026: Name, Age, Position(s) Period Garrick J.
During 2024, 47 percent of the natural gas supplied to all customers during the winter months was supplied from storage. 26 Table of Contents Presented in the following illustration are Consumers’ monthly weather-normalized natural gas deliveries (deliveries adjusted to reflect normal weather conditions) to its customers, including GCC deliveries, during 2024 and 2023: Gas Utility Properties: Consumers’ gas transmission, storage, and distribution system consists of: • 2,342 miles of transmission lines • 15 gas storage fields with a total storage capacity of 309 Bcf and a working gas volume of 154 Bcf • 28,368 miles of distribution mains • eight compressor stations with a total of 153,393 installed and available horsepower Under its Methane Reduction Plan, Consumers has set a goal of net-zero methane emissions from its natural gas delivery system by 2030.
During 2025, 46 percent of the natural gas supplied to all customers during the winter months was supplied from storage. 26 Table of Contents Presented in the following illustration are Consumers’ monthly weather-normalized natural gas deliveries (deliveries adjusted to reflect normal weather conditions) to its customers, including GCC deliveries, during 2025 and 2024: Gas Utility Properties: Consumers’ gas transmission, storage, and distribution system consists of: • 2,337 miles of transmission lines • 14 gas storage fields with a total storage capacity of 300 Bcf and a working gas volume of 153 Bcf • 28,433 miles of distribution mains • 8 compressor stations with a total of 147,393 installed and available horsepower Under its Methane Reduction Plan, Consumers has set a goal of net-zero methane emissions from its natural gas delivery system by 2030.
Presented in the following table are the number of employees of CMS Energy and Consumers: December 31 2024 2023 2022 CMS Energy, including Consumers Full-time and part-time employees 8,324 8,356 9,073 Consumers Full-time and part-time employees 8,090 8,144 8,879 At December 31, 2024, unions represented 44 percent of CMS Energy’s employees and 46 percent of Consumers’ employees.
Presented in the following table are the number of employees of CMS Energy and Consumers: December 31 2025 2024 2023 CMS Energy, including Consumers Full-time and part-time employees 8,350 8,324 8,356 Consumers Full-time and part-time employees 8,095 8,090 8,144 At December 31, 2025, unions represented 44 percent of CMS Energy’s employees and 45 percent of Consumers’ employees.
If CMS Energy, Consumers, or their subsidiaries failed to comply with applicable laws and regulations, they could become subject to fines, penalties, or disallowed costs, or be required to implement additional compliance, cleanup, or remediation programs, the cost of which could be material.
Rate proceedings and other regulatory actions may affect operations and financial results. If CMS Energy, Consumers, or their subsidiaries failed to comply with applicable laws and regulations, they could become subject to fines, penalties, or disallowed costs, or be required to implement additional compliance, cleanup, or remediation programs, the cost of which could be material.
NorthStar Clean Energy’s operating revenue was $316 million in 2024, $297 million in 2023, and $445 million in 2022.
NorthStar Clean Energy’s operating revenue was $408 million in 2025, $316 million in 2024, and $297 million in 2023.
Rochow (age 50) CMS Energy President, CEO, and Director 12/2020 – Present Executive Vice President 1/2020 – 12/2020 Consumers President, CEO, and Director 12/2020 – Present Executive Vice President 1/2020 – 12/2020 NorthStar Clean Energy Chairman of the Board, CEO, and Director 12/2020 – Present Rejji P.
Rochow (age 51) CMS Energy President, CEO, and Director 12/2020 – Present Consumers President, CEO, and Director 12/2020 – Present NorthStar Clean Energy Chairman of the Board, CEO, and Director 12/2020 – 7/2025 Rejji P.
In 2024, Consumers’ electric deliveries were 37 billion kWh, which included ROA deliveries of four billion kWh, resulting in net bundled sales of 33 billion kWh. In 2023, Consumers’ electric deliveries were 36 billion kWh, which included ROA deliveries of three billion kWh, resulting in net bundled sales of 33 billion kWh. Consumers’ electric utility operations are seasonal.
In 2025, Consumers’ electric deliveries were 37 billion kWh, which included ROA deliveries of 3 billion kWh, resulting in net bundled sales of 34 billion kWh. In 2024, Consumers’ electric deliveries were 37 billion kWh, which included ROA deliveries of 4 billion kWh, resulting in net bundled sales of 33 billion kWh. Consumers’ electric utility operations are seasonal.
The remaining 15 percent was purchased from authorized GCC suppliers and delivered by Consumers to customers in the GCC program. Presented in the following illustration are the supply arrangements for the gas Consumers delivered to GCC and GCR customers during 2024: Firm city-gate and firm gas transportation contracts are those that define a fixed amount, price, and delivery time frame.
Presented in the following illustration are the supply arrangements for the gas Consumers delivered to GCC and GCR customers during 2025: Firm city-gate and firm gas transportation contracts are those that define a fixed amount, price, and delivery time frame.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook—Consumers Electric Utility Outlook and Uncertainties—Electric Environmental Outlook. Insurance CMS Energy and its subsidiaries, including Consumers, maintain insurance coverage generally similar to comparable companies in the same lines of business.
For further information concerning estimated capital expenditures related to environmental matters, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook—Consumers Electric Utility Outlook and Uncertainties—Electric Environmental Outlook. Insurance CMS Energy and its subsidiaries, including Consumers, maintain insurance coverage generally similar to comparable companies in the same lines of business.
Consumers plans to reduce methane emissions from its system by about 80 percent, from 2012 baseline levels, by accelerating the replacement of aging pipe, rehabilitating or retiring outdated infrastructure, and adopting new technologies and practices. The remaining emissions will likely be offset by purchasing and/or producing renewable natural gas.
Consumers plans to reduce methane emissions from its system by about 80 percent from 2012 baseline levels by accelerating the replacement of aging pipe, rehabilitating or retiring outdated infrastructure, and adopting new technologies and practices. The remaining emissions will likely be offset through clean fuel alternatives or nature-based carbon removal pathways.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Contingencies and Commitments—Contractual Commitments. 8 Represents the net amount of generation offered to and purchased from the MISO energy market. 23 Table of Contents Presented in the following table are the sources of Consumers’ electric supply for the last three years: GWh Years Ended December 31 2024 2023 2022 Owned generation Gas 14,856 11,221 6,684 Coal 7,932 6,884 10,217 Renewable energy 2,521 1,993 2,217 Oil 96 2 4 Net pumped storage 1 (458) (349) (370) Total owned generation 24,947 19,751 18,752 Purchased power 2 Gas generation 9,662 7,244 7,182 Renewable energy generation 3,138 2,585 2,441 Coal generation 230 318 500 Nuclear generation 3 — — 2,692 Net interchange power 4 (2,715) 4,532 3,943 Total purchased and interchange power 10,315 14,679 16,758 Total supply 35,262 34,430 35,510 1 Represents Consumers’ share of net pumped-storage generation.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 4, Contingencies and Commitments—Contractual Commitments. 9 Reflects net delivered energy from storage operations, after accounting for charging losses. 10 Represents the net amount of generation offered to and purchased from the MISO energy market. 23 Table of Contents Presented in the following table are the sources of Consumers’ electric supply for the last three years: GWh Years Ended December 31 2025 2024 2023 Owned generation Gas 14,661 14,856 11,221 Coal 7,320 7,932 6,884 Renewable energy 2,509 2,521 1,993 Oil 106 96 2 Net pumped storage 1 (360) (458) (349) Total owned generation 24,236 24,947 19,751 Purchased power 2 Gas generation 8,439 9,662 7,244 Renewable energy generation 3,386 3,138 2,585 Battery storage 3 (8) — — Coal generation 352 230 318 Net interchange power 4 (502) (2,715) 4,532 Total purchased and interchange power 11,667 10,315 14,679 Total supply 35,903 35,262 34,430 1 Represents Consumers’ share of net pumped-storage generation.
Karn, Consumers holds gas transportation contracts to transport to the plant gas that Consumers or an agent purchase from the market. During 2024, Consumers acquired 29 percent of the electricity it provided to customers through long-term PPAs and the MISO energy market.
Karn, Consumers holds gas transportation contracts to transport to the plant gas that Consumers or an agent purchase from the market. During 2025, Consumers acquired 32 percent of its electric supply through long-term PPAs and the MISO energy market.
Consumers’ distribution system consists of: • 270 miles of high-voltage distribution overhead lines operating at 138 kV • four miles of high-voltage distribution underground lines operating at 138 kV • 4,646 miles of high-voltage distribution overhead lines operating at 46 kV and 69 kV • 18 miles of high-voltage distribution underground lines operating at 46 kV • 81,924 miles of electric distribution overhead lines • 9,775 miles of underground distribution lines • 1,098 substations with an aggregate transformer capacity of 28 million kVA Consumers is interconnected to the interstate high-voltage electric transmission system owned by METC and operated by MISO.
Consumers’ distribution system consists of: • 263 miles of high-voltage distribution overhead lines operating at 138 kV • 4 miles of high-voltage distribution underground lines operating at 138 kV • 4,619 miles of high-voltage distribution overhead lines operating at 46 kV and 69 kV • 18 miles of high-voltage distribution underground lines operating at 46 kV • 82,854 miles of electric distribution overhead lines • 10,027 miles of underground distribution lines • 1,102 substations with an aggregate transformer capacity of 29 million kVA Consumers is interconnected to the interstate high-voltage electric transmission system owned by METC and operated by MISO.
Consumers also faces competition or potential competition associated with industrial customers relocating all or a portion of their production capacity outside of Consumers’ service territory for economic reasons; municipalities owning or operating competing electric delivery systems; and customer self-generation.
Consumers also faces competition or potential competition associated with data center expansion and industrial customer relocation outside of Consumers’ service territory for economic reasons; municipalities owning or operating competing electric delivery systems; and customer self-generation.
Independent Power Production: Presented in the following table is information about the independent power plants in which CMS Energy had an ownership interest at December 31, 2024: Location Ownership Interest (%) Primary Fuel Type Gross Capacity (MW) 1 2024 Net Generation (GWh) Dearborn, Michigan 100 Natural gas 770 5,655 Jackson County, Arkansas 100 Solar 180 363 Gaylord, Michigan 100 Natural gas 134 20 Paulding County, Ohio 2 100 Wind 100 270 Comstock, Michigan 100 Natural gas 76 245 Delta Township, Michigan 2 100 Solar 24 40 Phillips, Wisconsin 3 100 Solar 3 4 Paulding County, Ohio 100 Solar and storage 3 — Coke County, Texas 51 Wind 525 1,786 Filer City, Michigan 50 Coal 73 230 New Bern, North Carolina 50 Wood waste 50 261 Flint, Michigan 50 Wood waste 40 96 Grayling, Michigan 50 Wood waste 38 164 Total 2,016 9,134 1 Represents the intended full-load sustained output of each plant.
Independent Power Production: Presented in the following table is information about the independent power plants in which CMS Energy had an ownership interest at December 31, 2025: Location Ownership Interest (%) Primary Fuel Type Gross Capacity (MW) 1 2025 Net Generation (GWh) Dearborn, Michigan 100 Natural gas 770 3,965 Jackson County, Arkansas 100 Solar 180 356 Gaylord, Michigan 100 Natural gas 134 22 Comstock, Michigan 100 Natural gas 76 136 Genesee County, Michigan 2 100 Solar 42 1 Alpena, Michigan 3 100 Solar 21 27 Saginaw, Michigan 3 100 Solar 8 10 Paulding County, Ohio 100 Solar and Storage 3 — Grayling, Michigan 3 100 Solar 1 — Coke County, Texas 51 Wind 525 1,697 Paulding County, Ohio 4 50 Wind 100 299 Filer City, Michigan 50 Coal 73 351 New Bern, North Carolina 50 Wood waste 50 284 Flint, Michigan 50 Wood waste 40 117 Grayling, Michigan 50 Wood waste 38 182 Delta Township, Michigan 4 50 Solar 24 38 Total 2,085 7,485 1 Represents the intended full-load sustained output of each plant.
At December 31, 2024, Consumers had future commitments to purchase capacity and energy under long-term PPAs with various generating plants. These contracts require monthly capacity payments based on the plants’ availability or deliverability. The payments for 2025 through 2047 are estimated to total $7.0 billion and, for each of the next five years, $0.7 billion annually.
At December 31, 2025, Consumers had future commitments to purchase capacity and energy under long‑term PPAs with various generating plants. These contracts require monthly capacity payments based on the plants’ availability or deliverability.
Consumers’ estimate of capital and cost of removal expenditures to comply with regulations relating to ash disposal is $237 million from 2025 through 2029. Consumers’ future costs to comply with solid waste disposal regulations may vary depending on future legislation, litigation, executive orders, treaties, or rulemaking. For further information concerning estimated capital expenditures related to environmental matters, see Item 7.
Consumers’ estimate of capital and cost of removal expenditures to comply with regulations relating to ash disposal is $241 million from 2026 through 2030. Consumers’ future costs to comply with solid waste disposal regulations may vary depending on future legislation, litigation, executive orders, treaties, or rulemaking.
Department of Transportation’s Office of Pipeline Safety regulates the safety and security of gas pipelines through the Natural Gas Pipeline Safety Act of 1968 and subsequent laws. The Transportation Security Administration, an agency of the U.S. Department of Homeland Security, regulates certain activities related to the safety and security of natural gas pipelines.
Secretary of Energy to temporarily alter the operation of the electricity system during emergencies. The U.S. Department of Transportation’s Office of Pipeline Safety regulates the safety and security of gas pipelines through the Natural Gas Pipeline Safety Act of 1968 and subsequent laws. The Transportation Security Administration, an agency of the U.S.
During 2024, the pumped-storage facility consumed 1,721 GWh of electricity to pump water during off-peak hours for storage in order to generate 1,263 GWh of electricity later during peak-demand hours. 2 Represents purchases under long-term PPAs. 3 Represents purchases from a nuclear generating facility that closed in May 2022. 4 Represents the net amount of generation offered to and purchased from the MISO energy market.
During 2025, the pumped-storage facility consumed 1,351 GWh of electricity to pump water during off-peak hours for storage in order to generate 991 GWh of electricity later during peak-demand hours. 2 Represents purchases under long-term PPAs, including capacity purchases. 3 Reflects net delivered energy from storage operations, after accounting for charging losses. 4 Represents the net amount of generation offered to and purchased from the MISO energy market.
Campbell 1 & 2 – West Olive 2 2 Units, 1962-1967 540 2,718 J.H. Campbell 3 – West Olive 2,3 1 Unit, 1980 791 5,214 1,331 7,932 Oil/Gas steam generation D.E.
Campbell 1 & 2 – West Olive 2 2 Units, 1962-1967 — 2,568 J.H. Campbell 3 – West Olive 2,3 1 Unit, 1980 — 4,752 — 7,320 Oil/Gas steam generation D.E.
The strategy is aimed at integrating principles of equity and inclusion into every process and co ‑ worker experience. To measure their success, CMS Energy and Consumers utilize select questions in the annual engagement survey to create a diversity, equity, and inclusion index. For the year ended December 31, 2024, the diversity, equity, and inclusion index score was 73 percent.
To measure their success, CMS Energy and Consumers utilize select questions in the annual engagement survey to create a diversity, equity, and inclusion index. For the year ended December 31, 2025, the diversity, equity, and inclusion index score was 75 percent.
Karn 3 & 4 – Essexville 2 Units, 1975-1977 1,200 96 Hydroelectric Ludington – Ludington 6 Units, 1973 1,112 4 (458) 5 Conventional hydro generation 35 Units, 1906-1949 75 366 1,187 (92) Gas combined cycle Covert Generating Station – Covert 3 Units, 2004 1,089 7,159 Jackson – Jackson 1 Unit, 2002 534 2,001 Zeeland – Zeeland 3 Units, 2002 520 3,963 2,143 13,123 Gas combustion turbines Zeeland (simple cycle) – Zeeland 2 Units, 2001 314 1,733 Wind generation Crescent Wind Farm – Hillsdale County 2021 150 369 Cross Winds ® Energy Park – Tuscola County 2014-2019 232 721 Gratiot Farms Wind Project – Gratiot County 2020 150 364 Heartland Farms Wind Project – Gratiot County 2023 200 432 Lake Winds ® Energy Park – Mason County 2012 101 262 833 2,148 Solar generation Solar Gardens – Allendale, Cadillac, and Kalamazoo 2016-2021 5 7 Battery storage capacity Batteries – Grand Rapids, Cadillac, Kalamazoo, and Standish 4 Units, 2021-2022 3 — Total owned generation 7,016 24,947 Purchased power 6 Coal generation – T.E.S.
Karn 3 & 4 – Essexville 2 Units, 1975-1977 1,189 106 Hydroelectric Ludington – Ludington 6 Units, 1973 1,119 4 (360) 5 Conventional hydro generation 6 35 Units, 1906-1949 75 344 1,194 (16) Gas combined cycle Covert Generating Station – Covert 3 Units, 2004 1,090 7,357 Jackson – Jackson 1 Unit, 2002 531 1,979 Zeeland – Zeeland 3 Units, 2002 534 3,952 2,155 13,288 Gas combustion turbines Zeeland (simple cycle) – Zeeland 2 Units, 2001 314 1,373 Wind generation Crescent Wind Farm – Hillsdale County 2021 150 362 Cross Winds ® Energy Park – Tuscola County 2014-2019 231 728 Gratiot Farms Wind Project – Gratiot County 2020 150 345 Heartland Farms Wind Project – Gratiot County 2023 200 470 Lake Winds ® Energy Park – Mason County 2012 101 251 832 2,156 Solar generation Solar Gardens – Allendale, Cadillac, Kalamazoo, and Grand Rapids 2016-2021 5 7 Muskegon Solar Energy Center 2025 250 2 255 9 Battery storage capacity Batteries – Grand Rapids, Cadillac, Kalamazoo, and Standish 4 Units, 2021-2022 1 — Total owned generation 5,940 24,236 Purchased power 7 Coal generation – T.E.S.
During 2024, 42 percent of the electric energy Consumers provided to customers was generated by its natural gas‑fueled generating units, which burned 107 Bcf of natural gas and produced a combined total of 14,856 GWh of electricity.
During 2025, 41 percent of Consumers’ electric supply was generated by its natural gas‑fueled generating units, which burned 105 Bcf of natural gas and produced a combined total of 14,661 GWh of electricity.
This talent strategy allows CMS Energy and Consumers to shape co-workers’ experience and enable leaders to coach and develop co ‑ workers, source talent, and anticipate and adjust to changing skill sets in the business environment. 34 Table of Contents Diversity, Equity, and Inclusion As a part of their People Strategy, CMS Energy and Consumers employ a broad and holistic diversity, equity, and inclusion strategy focused on embracing differences.
This talent strategy allows CMS Energy and Consumers to shape co-workers’ experience and enable leaders to coach and develop co ‑ workers, source talent, and anticipate and adjust to changing skill sets in the business environment.
The operating revenue from independent power production was $69 million in 2024, $64 million in 2023, and $58 million in 2022. Energy Resource Management: CMS ERM purchases and sells energy commodities in support of NorthStar Clean Energy’s generating facilities with a focus on optimizing the independent power production portfolio.
Energy Resource Management: CMS ERM purchases and sells energy commodities in support of NorthStar Clean Energy’s generating facilities with a focus on optimizing the independent power production portfolio. In 2025, CMS ERM marketed 2 Bcf of natural gas and 7,625 GWh of electricity.
In 2024, CMS ERM marketed one Bcf of natural gas and 7,475 GWh of electricity. Electricity marketed by CMS ERM was generated by independent power production of NorthStar Clean Energy and by unrelated third parties. CMS ERM’s operating revenue was $247 million in 2024, $233 million in 2023, and $387 million in 2022.
Electricity marketed by CMS ERM was generated by independent power production of NorthStar Clean 29 Table of Contents Energy and by unrelated third parties. CMS ERM’s operating revenue was $331 million in 2025, $247 million in 2024, and $233 million in 2023. NorthStar Clean Energy Competition: NorthStar Clean Energy competes with other energy developers, energy retailers, and independent power producers.
These parties often challenge various aspects of those proceedings, including the prudence of Consumers’ policies and practices, and seek cost disallowances and other relief. The parties also have appealed significant MPSC orders. Rate Proceedings: For information regarding open rate proceedings, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook and Item 8.
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 and FERC orders. Other Regulation The U.S.
In November 2024, Consumers filed updates to its renewable energy plan, proposing an addition of up to 9,000 MW of both purchased and owned solar energy resources and up to 2,800 MW of new, competitively bid wind capacity. These actions will enable Consumers to achieve 60 percent renewable energy by 2035 and 100 percent clean energy by 2040.
Consumers’ updates to its Renewable Energy Plan include up to 9,000 MW of both purchased and owned solar energy resources and up to 4,000 MW of wind energy resources. Coupled with updates to its integrated resource plan, these actions position Consumers to achieve 60‑percent renewable energy by 2035 and 100‑percent clean energy by 2040.
The remaining emissions will likely be offset by purchasing and/or producing renewable natural gas. For additional information on Consumers’ Methane Reduction Plan, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook—Consumers Gas Utility Outlook and Uncertainties—Gas Environmental Outlook.
For additional information on Consumers’ Methane Reduction Plan, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook—Consumers Gas Utility Outlook and Uncertainties—Gas Environmental Outlook. Consumers has also set a goal to reduce customer greenhouse gas emissions by 25 percent by 2035.
Filer City 63 230 Gas generation – MCV Facility 7 1,240 8,440 Other gas generation 153 1,222 Wind generation 384 996 Solar generation 803 1,152 Other renewable generation 194 990 2,837 13,030 Net interchange power 8 — (2,715) Total purchased and interchange power 2,837 10,315 Total supply 9,853 35,262 Less distribution and transmission loss 2,065 Total net bundled sales 33,197 1 With the exception of wind and solar generation, the amount represents generation capacity during the summer months (planning year 2024 capacity as reported to MISO and limited by interconnection service limits).
Filer City 63 352 Gas generation – MCV Facility 8 1,240 7,206 Other gas generation 254 1,233 Wind generation 384 1,026 Solar generation 1,017 1,355 Battery storage 100 (8) 9 Other renewable generation 192 1,005 3,250 12,169 Net interchange power 10 — (502) Total purchased and interchange power 3,250 11,667 Total supply 9,190 35,903 Less distribution and transmission loss 2,094 Total net bundled sales 33,809 22 Table of Contents 1 With the exception of wind and solar generation, the amount represents generation capacity during the summer months (planning year 2025 capacity as reported to MISO and limited by interconnection service limits).
The amount of capacity relating to CMS Energy’s ownership interest was 1,658 MW and net generation relating to CMS Energy’s ownership interest was 7,883 GWh at December 31, 2024. 2 NorthStar Clean Energy has entered into an agreement to sell a noncontrolling interest in this plant in 2025. 3 NorthStar Clean Energy has entered into an agreement to sell this plant in 2025.
The amount of capacity relating to CMS Energy’s ownership interest was 1,665 MW and net generation relating to CMS Energy’s ownership interest was 6,018 GWh at December 31, 2025. 2 This project began operations in December 2025. 3 Represents a behind-the-meter system located on customer premises. 4 NorthStar Clean Energy sold a noncontrolling interest in this plant in 2025.
Under its Methane Reduction Plan, Consumers has set a goal of net-zero methane emissions from its natural gas delivery system by 2030. Consumers plans to reduce methane emissions from its system by about 80 percent, from 2012 baseline levels, by accelerating the replacement of aging pipe, rehabilitating or retiring outdated infrastructure, and adopting new technologies and practices.
Consumers plans to reduce methane emissions from its system by about 80 percent from 2012 baseline levels by accelerating the replacement of aging pipe, rehabilitating or retiring outdated infrastructure, and adopting new technologies and practices. The remaining emissions will likely be offset through clean fuel alternatives or nature-based carbon removal pathways.
In order to continue providing controllable sources of electricity to customers while expanding its investment in renewable energy, Consumers purchased the Covert Generating Station, a natural gas-fueled generating facility with 1,200 MW of nameplate capacity, in May 2023.
To continue providing controllable sources of electricity to customers, Consumers purchased the Covert Generating Station, representing 1,200 MW of nameplate capacity, in 2023 and has solicited additional capacity from controllable sources of electricity to customers.
Consumers is also interconnected to neighboring utilities and to other transmission systems. Electric Utility Generation and Supply Mix: Consumers’ Clean Energy Plan details its strategy to meet customers’ long-term energy needs. The Clean Energy Plan was most recently revised and approved by the MPSC in 2022.
Consumers is also interconnected to neighboring utilities and to other transmission systems. Electric Utility Generation and Supply Mix: Consumers’ Electric Supply Plan, its long-term strategy for delivering safe, reliable, affordable, clean, and equitable energy to its customers, is outlined in its integrated resource plan and incorporates Consumers’ Renewable Energy Plan.
Berry (age 52) CMS Energy Senior Vice President 2/2022 – Present Consumers Senior Vice President 2/2022 – Present Vice President 11/2018 – 2/2022 Brandon J.
Berry (age 53) CMS Energy Executive Vice President and Chief Operating Officer 7/2025 – Present Senior Vice President 2/2022 – 7/2025 Consumers Executive Vice President and Chief Operating Officer 7/2025 – Present Senior Vice President 2/2022 – 7/2025 Vice President 11/2018 – 2/2022 Shaun M.
Accordingly, CMS Energy and Consumers have worked to integrate a set of safety principles into their business operations and culture. These principles include complying with applicable safety, health, and security regulations and implementing programs and processes aimed at continually improving safety and security conditions.
These principles include complying with applicable safety, health, and security regulations and implementing programs and processes aimed at continually improving safety and security conditions. On an annual basis, CMS Energy and Consumers set various safety goals tied to the OSHA recordable incident rate and to high-risk injuries.
For further information on Consumers’ progress towards its net-zero methane emissions goal, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Overview. 27 Table of Contents Gas Utility Supply: In 2024, Consumers purchased 85 percent of the gas it delivered to its full-service sales customers.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Overview. Gas Utility Supply: In 2025, Consumers purchased 86 percent of the gas it delivered to its full-service sales customers. The remaining 14 percent was purchased from authorized GCC suppliers and delivered by Consumers to customers in the GCC program.
In order to address this competition and to be able to meet their human capital needs, CMS Energy and Consumers provide compensation and benefits that are competitive with industry peers. Furthermore, CMS Energy and Consumers have developed a comprehensive talent strategy, the People Strategy, to attract, develop, and retain highly skilled co-workers.
Within the utility industry, there is strong competition for rare, high-demand talent, including those related to electric line work, renewable energy generation, technology, and data analytics. In order to address this competition and to be able to meet their human capital needs, CMS Energy and Consumers provide compensation and benefits that are competitive with industry peers.
Hofmeister (age 48) CMS Energy Senior Vice President 7/2017 – Present Consumers Senior Vice President 7/2017 – Present NorthStar Clean Energy Senior Vice President 9/2017 – 6/2024 36 Table of Contents Name, Age, Position(s) Period Shaun M.
Johnson (age 47) CMS Energy Executive Vice President and Chief Legal and Administrative Officer 7/2025 – Present Senior Vice President and General Counsel 5/2019 – 7/2025 Consumers Executive Vice President and Chief Legal and Administrative Officer 7/2025 – Present Senior Vice President and General Counsel 5/2019 – 7/2025 NorthStar Clean Energy Senior Vice President, General Counsel, and Director 4/2019 – 6/2024 37 Table of Contents Name, Age, Position(s) Period Brandon J.
For wind and solar generation, the amount represents installed capacity during the summer months. 22 Table of Contents 2 Consumers plans to retire these generating units in 2025. 3 Represents Consumers’ share of the capacity of the J.H.
For wind and solar generation, the amount represents installed capacity. 2 Consumers planned to retire these generating units in May 2025. However, the retirement of J.H. Campbell is subject to temporary extensions under emergency orders issued by the U.S. Secretary of Energy.
These amounts may vary depending 24 Table of Contents on plant availability and fuel costs. For further information about Consumers’ future capacity and energy purchase obligations, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Capital Resources and Liquidity—Other Material Cash Requirements and Item 8.
The payments for 2026 through 2060 are estimated to total $17.0 billion and, for each of the next five years, range from $0.9 billion to $1.0 billion annually. These amounts may vary depending on plant availability and fuel costs. For further information about 24 Table of Contents Consumers’ future capacity and energy purchase obligations, see Item 7.
In conjunction with its coal supply contracts, Consumers leases a fleet of railcars and has transportation contracts with various companies to provide rail services for delivery of purchased coal to Consumers’ generating facilities. Consumers’ coal transportation contracts are future commitments and expire on various dates through 2025; payment obligations under these contracts totaled $65 million at December 31, 2024.
In order to obtain the coal it needs, Consumers has historically entered into physical coal supply contracts, leased a fleet of railcars, and secured transportation contracts with various companies to provide rail services for delivery of purchased coal to Consumers’ generating facilities.
High-risk injuries encompass all recordable and non-recordable incidents with the potential for serious injury or fatality. In 2024, the companies recorded 11 high-risk injuries, achieving their goal of less than 13 high-risk injuries. Within the utility industry, there is strong competition for rare, high-demand talent, including those related to electric line work, renewable energy generation, technology, and data analytics.
The companies’ OSHA recordable incident rate was 2.34 in 2025 and 1.71 in 2024. High-risk injuries encompass all recordable and non-recordable incidents with the potential for serious injury or fatality. In 2025, the companies recorded nine high-risk injuries, achieving their goal of less than 12 high-risk injuries.
The pumped-storage facility consumes electricity to pump water during off-peak hours for storage in order to generate electricity later during peak‑demand hours. 6 Represents purchases under long-term PPAs. 7 For information about Consumers’ long-term PPA related to the MCV Facility, see Item 8.
The pumped-storage facility consumes electricity to pump water during off-peak hours for storage in order to generate electricity later during peak‑demand hours. 6 In 2025, Consumers entered an agreement to sell the 13 hydroelectric dams that comprise the 35 generating units. For a more detailed discussion of this transaction, see Item 8.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2, Regulatory Matters. 30 Table of Contents Other Regulation The U.S. Secretary of Energy regulates imports and exports of natural gas and has delegated various aspects of this jurisdiction to FERC and the U.S. Department of Energy’s Office of Fossil Fuels. The U.S.
Secretary of Energy regulates imports and exports of natural gas and has delegated various aspects of this jurisdiction to FERC and the DOE’s Office of Fossil Fuels. Additionally, the U.S. Secretary of Energy has the authority to issue emergency orders for power plants under section 202(c) of the Federal Power Act. This provision allows the U.S.
On an annual basis, CMS Energy and Consumers set various safety goals tied to the OSHA recordable incident rate and high-risk injuries. The companies’ OSHA recordable incident rate was 1.71 in 2024 and 1.48 in 2023. The target recordable incident rate for 2025 is 1.00, which, if achieved, would place Consumers within the first quartile of its EEI peer group.
Beginning in 2026, the companies will utilize the serious injury incidence rate to measure and set safety goals. The target serious injury incidence rate for 2026 is 0.037, which, if achieved, would place Consumers within the second quartile of its EEI peer group.
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. 33 Table of Contents The safety of co-workers, customers, and the general public is a priority of CMS Energy and Consumers.
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.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Contingencies and Commitments—Contractual Commitments. During 2024, 22 percent of the electric energy Consumers provided to customers was generated by its coal-fueled generating units, which burned four million tons of coal and produced a combined total of 7,932 GWh of electricity.
During 2025, 20 percent of Consumers’ electric supply was generated by its coal-fueled generating units, which burned 4 million tons of coal and produced a combined total of 7,320 GWh of electricity. Consumers planned to exit coal generation in 2025 but the retirement of J.H. Campbell is subject to temporary extensions under emergency orders issued by the U.S.
Removed
Under Michigan’s integrated resource planning process, Consumers will file updates 20 Table of Contents to its Clean Energy Plan in 2026. Together with updates to its renewable energy plan that Consumers filed in November 2024, these updated plans will serve as Consumers’ blueprint to meeting the requirements of the 2023 Energy Law that was enacted in Michigan in November 2023.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAdditionally, natural gas pipeline infrastructure has recently been under scrutiny following disruptions related to extreme weather and cyber incidents. Additional regulation in this area could adversely affect Consumers’ gas operations. CMS Energy and Consumers have announced ambitious plans to reduce their impact on climate change and increase the reliability of their electric distribution system.
Biggest changeCMS Energy and Consumers cannot predict the impact of the DOE or FERC orders or actions of NERC and its regional entities on electric system reliability. Additionally, natural gas pipeline infrastructure has recently been under scrutiny following disruptions related to extreme weather and cyber incidents. Additional regulation in this area could adversely affect Consumers’ gas operations.
Advancements in technology related to items such as battery storage, carbon capture/storage, and electric vehicles may not become commercially available or economically feasible as projected. Customer programs such as energy efficiency and demand response may not realize the projected levels of customer participation. Consumers has also announced its Reliability Roadmap.
Advancements in technology related to items such as battery storage, carbon capture/storage, and electric vehicles may not become commercially available or economically feasible as projected. Customer programs such as energy efficiency and demand response may not realize the projected levels of customer participation. Consumers has also announced its electric Reliability Roadmap.
The following risks related to climate change, emissions, and environmental regulations could also have a material adverse impact on CMS Energy and Consumers: • a change in policy/regulation, regulators’ implementation of policy/regulation or litigation originated by third parties against CMS Energy or Consumers due to CMS Energy’s or Consumers’ greenhouse gas or other emissions or CCR disposal and storage • impairment of CMS Energy’s or Consumers’ reputation due to their greenhouse gas or other emissions and public perception of their response to potential environmental regulations, rules, and legislation • weather that may affect customer demand, company operations, or company infrastructure, including catastrophic weather-related damage and extreme temperatures; natural disasters such as severe storms, floods, and droughts; fires; or smoke • implementation of state or federal environmental justice requirements Consumers expects to collect fully from its customers, through the ratemaking process, expenditures incurred to comply with environmental regulations, but cannot guarantee this outcome.
The following risks related to climate change, emissions, and environmental regulations could also have a material adverse impact on CMS Energy and Consumers: • a change in policy/regulation, regulators’ implementation of policy/regulation or litigation originated by third parties against CMS Energy or Consumers due to CMS Energy’s or Consumers’ greenhouse gas or other emissions or CCR disposal and storage • impairment of CMS Energy’s or Consumers’ reputation due to their greenhouse gas or other emissions and public perception of their response to potential environmental regulations, rules, orders, and legislation • weather that may affect customer demand, company operations, or company infrastructure, including catastrophic weather-related damage and extreme temperatures; natural disasters such as severe storms, floods, and droughts; fires; or smoke • implementation of state or federal environmental justice requirements Consumers expects to collect fully from its customers, through the ratemaking process, expenditures incurred to comply with environmental regulations, but cannot guarantee this outcome.
The success of these capital investments depends on or could be affected by a variety of factors that include, but are not limited to: • effective pre-acquisition evaluation of asset values, future operating costs, potential environmental and other liabilities, and other factors beyond Consumers’ control • effective cost and schedule management of new capital projects • availability of qualified construction personnel, both internal and contracted • effective and timely contractor performance • changes in commodity and other prices, applicable tariffs, and/or material and equipment availability • governmental actions • interconnection uncertainty, delays, and costs for electric generation projects • operational performance • changes in environmental, legislative, and regulatory requirements • regulatory cost recovery • inflation of labor rates and material and equipment prices • supply chain disruptions and increased lead times • barriers to accessing key materials for renewable projects (solar, battery, and other key equipment) created by geopolitical relations It is possible that adverse events associated with these factors could have a material adverse effect on Consumers.
The success of these capital investments depends on or could be affected by a variety of factors that include, but are not limited to: • effective pre-acquisition evaluation of asset values, future operating costs, potential environmental and other liabilities, and other factors beyond Consumers’ control • effective cost and schedule management of new capital projects • availability of qualified construction personnel, both internal and contracted • effective and timely contractor performance • changes in commodity and other prices, applicable tariffs, and/or material and equipment availability • governmental actions • interconnection uncertainty, delays, and costs for electric generation projects 46 Table of Contents • operational performance • changes in environmental, legislative, and regulatory requirements • regulatory cost recovery • inflation of labor rates and material and equipment prices • supply chain disruptions and increased lead times • barriers to accessing key materials for renewable projects (solar, battery, and other key equipment) created by geopolitical relations It is possible that adverse events associated with these factors could have a material adverse effect on Consumers.
CMS Energy and Consumers cannot predict the impact of new laws, rules, regulations, tariffs, principles, or practices by federal or state agencies or wholesale electricity market operators, or challenges or changes to present laws, rules, regulations, tariffs, principles, or practices and the interpretation of any adoption or change.
CMS Energy and Consumers cannot predict the impact of new laws, rules, regulations, tariffs, principles, orders, or practices by federal or state agencies or wholesale electricity market operators, or challenges or changes to present laws, rules, regulations, tariffs, principles, orders, or practices and the interpretation of any adoption or change.
Consumers’ ability to pay dividends or acquire its own stock from CMS Energy is limited by restrictions contained in Consumers’ preferred stock provisions and potentially by other legal restrictions, such as certain terms in its articles of incorporation and FERC requirements. 38 Table of Contents CMS Energy has indebtedness that could limit its financial flexibility and its ability to meet its debt service obligations.
Consumers’ ability to pay dividends or acquire its own stock from CMS Energy is limited by restrictions contained in Consumers’ preferred stock provisions and potentially by other legal restrictions, such as certain terms in its articles of incorporation and FERC requirements. 39 Table of Contents CMS Energy has indebtedness that could limit its financial flexibility and its ability to meet its debt service obligations.
Natural disasters, severe weather, extreme temperatures, fires, smoke, flooding, wars, terrorist acts, civil unrest, vandalism, theft, cyber incidents, pandemics, and other catastrophic events could result in severe damage to CMS Energy’s and Consumers’ assets beyond what could be recovered through insurance policies (which are subject to deductibles, limitations, and self-insurance amounts that could be material), could require CMS Energy and Consumers to incur significant upfront costs, and could severely disrupt operations, resulting in loss of service to customers.
Natural disasters, severe weather, extreme temperatures, wildfires, fires, smoke, flooding, wars, terrorist acts, civil unrest, vandalism, theft, cyber incidents, government shutdowns, pandemics, and other catastrophic events could result in severe damage to CMS Energy’s and Consumers’ assets beyond what could be recovered through insurance policies (which are subject to deductibles, limitations, and self‑insurance amounts that could be material), could require CMS Energy and Consumers to incur significant upfront costs, and could severely disrupt operations, resulting in loss of service to customers.
Consumers’ rates are regulated by the MPSC, while alternative electric suppliers charge market-based rates, putting competitive pressure on Consumers’ electric supply. Groups are advocating for an ROA-like community solar system that allows third parties to sell directly to customers and offer them a regulated bill credit.
Consumers’ rates are regulated by the MPSC, while alternative electric suppliers charge market-based rates, putting competitive pressure on Consumers’ electric supply. Groups are advocating for an ROA-like community solar program that allows third parties to sell directly to customers and offer them a regulated bill credit.
Michigan law allows electric customers in Consumers’ service territory to buy electric generation service from alternative electric suppliers in an aggregate amount capped at ten percent of Consumers’ sales, with certain exceptions. The proportion of Consumers’ electric deliveries under the ROA program and on the ROA waiting list is over ten percent.
Michigan law allows electric customers in Consumers’ service territory to buy electric generation service from alternative electric suppliers in an aggregate amount capped at 10 percent of Consumers’ sales, with certain exceptions. The proportion of Consumers’ electric deliveries under the ROA program and on the ROA waiting list is over 10 percent.
Depending on the extent to which the buyers might ultimately seek to enforce their rights under these contractual provisions, and the resolution of any disputes concerning them, there could be a material adverse effect on CMS Energy’s or Consumers’ liquidity, financial condition, and results of operations. 45 Table of Contents Consumers is exposed to risks related to general economic conditions in its service territories.
Depending on the extent to which the buyers might ultimately seek to enforce their rights under these contractual provisions, and the resolution of any disputes concerning them, there could be a material adverse effect on CMS Energy’s or Consumers’ liquidity, financial condition, and results of operations. Consumers is exposed to risks related to general economic conditions in its service territories.
When unplanned outages occur, CMS Energy and Consumers will not only 48 Table of Contents incur unexpected maintenance expenses, but may also have to make spot market purchases of electric and gas commodities that may exceed CMS Energy’s or Consumers’ expected cost of generation or gas supply, be forced to curtail services, or retire a given asset if the cost or timing of the maintenance is not reasonable and prudent.
When unplanned outages occur, CMS Energy and Consumers will not only incur unexpected maintenance expenses, but may also have to make spot market purchases of electric and gas commodities that may exceed CMS Energy’s or Consumers’ expected cost of generation or gas supply, be forced to curtail services, or retire a given asset if the cost or timing of the maintenance is not reasonable and prudent.
Consumers expects to incur additional substantial costs related to the remediation of its former MGP sites and other response activity costs at a number of other former sites, including, but not limited to, sites of retired coal-fueled electric generating units and sites containing coal ash and related materials, under 44 Table of Contents NREPA, RCRA, CERCLA and related state and federal regulations.
Consumers expects to incur additional substantial costs related to the remediation of its former MGP sites and other response activity costs at a number of other former sites, including, but not limited to, sites of retired coal-fueled electric generating units and sites containing coal ash and related materials, under NREPA, RCRA, CERCLA and related state and federal regulations.
The Reliability Roadmap includes larger investments in grid hardening, distribution capacity, and automation to deliver better than median reliability to customers given increasingly severe weather and customer adoption of new technologies. The MPSC or other third parties may prohibit, delay, or impair the Reliability Roadmap and some or all 42 Table of Contents of the associated capital investments.
The Reliability Roadmap includes larger investments in grid hardening, distribution capacity, and automation to deliver better than median reliability to customers given increasingly severe weather and customer adoption of new technologies. The MPSC or other third parties may prohibit, delay, or impair the Reliability Roadmap and some or all of the associated capital investments.
The amounts involved may or may not be material. 39 Table of Contents Certain of CMS Energy’s and Consumers’ securities and those of their affiliates are rated by various credit rating agencies.
The amounts involved may or may not be material. 40 Table of Contents Certain of CMS Energy’s and Consumers’ securities and those of their affiliates are rated by various credit rating agencies.
Changes to the tariffs or business practice manuals of certain wholesale market operators such as MISO, PJM, or ERCOT, or corresponding impacts 41 Table of Contents such as interconnection delays for new electric generation or storage projects, could also have a material adverse effect on CMS Energy and Consumers.
Changes to the tariffs or business practice manuals of certain wholesale market operators such as MISO, PJM, or ERCOT, or corresponding impacts such as interconnection delays for new electric generation or storage projects, could also have a material adverse effect on CMS Energy and Consumers.
Federal, state, and local environmental laws and rules, as well as international accords and treaties, could require CMS Energy and Consumers to install additional equipment for emission controls, undertake heat-rate improvement projects, purchase carbon emissions allowances, curtail operations, invest in generating capacity with fewer carbon dioxide emissions, or take other significant steps to manage or lower the emission of greenhouse gases.
Federal, state, and local environmental laws, regulations and orders, as well as international accords and treaties, could require CMS Energy and Consumers to install additional equipment for emission controls, undertake heat-rate improvement projects, purchase carbon emissions allowances, curtail or extend operations, invest in generating capacity with fewer carbon dioxide emissions, or take other significant steps to manage or lower the emission of greenhouse gases.
The consumption of electric energy typically increases in the summer months, due primarily to the use of air conditioners and other cooling equipment, while peak demand for natural gas occurs in the winter due to colder temperatures and the resulting use of natural gas as heating fuel.
The consumption of electric energy typically increases in the summer months, due primarily to the use of air conditioners and other cooling equipment, while peak demand for natural gas occurs in the winter due to colder temperatures and the 47 Table of Contents resulting use of natural gas as heating fuel.
Cyber attacks, which include the use of malware, ransomware, computer viruses, and other means for disruption or 46 Table of Contents unauthorized access against companies, including CMS Energy and Consumers, are increasing in frequency, scope, and potential impact.
Cyber attacks, which include the use of malware, ransomware, computer viruses, and other means for disruption or unauthorized access against companies, including CMS Energy and Consumers, are increasing in frequency, scope, and potential impact.
CMS Energy and Consumers and its contractors may be unable to acquire, site, construct timely, and/or permit generation and storage capacity, including some or all of the generation and storage capacity proposed in Consumers’ plan.
CMS Energy and Consumers and its contractors may be unable to acquire, site, construct timely, and/or permit generation and storage capacity, including some or all of the generation and storage capacity 43 Table of Contents proposed in Consumers’ plan.
If Consumers were unable to recover these expenditures from customers in rates, CMS Energy or Consumers could be required to seek significant additional financing to fund these expenditures. For additional information regarding compliance with environmental regulations, see Item 1. Business—CMS Energy and Consumers Environmental Strategy and Compliance and Item 7.
If Consumers were unable to recover these expenditures from customers in rates, CMS Energy or Consumers could be required to seek significant additional financing to fund these expenditures. 45 Table of Contents For additional information regarding compliance with environmental regulations, see Item 1. Business—CMS Energy and Consumers Environmental Strategy and Compliance and Item 7.
In addition, any delay or default in payment or performance, including inadequate performance, of contractual obligations (such as contractual obligations by third parties to perform work, supply equipment, provide services, and meet related specifications or requirements), could have a material adverse effect on CMS Energy and Consumers.
In addition, any delay or default in payment or performance, including inadequate performance, of contractual obligations (such 50 Table of Contents as contractual obligations by third parties to purchase utility services, perform work, supply equipment, provide services, and meet related specifications or requirements), could have a material adverse effect on CMS Energy and Consumers.
Regulators could face competitive or political pressures to avoid or limit rate increases for a number of reasons, including economic downturn in the state, reliability and economic justice concerns, or decreased customer base, among others.
Regulators could face competitive or political pressures to avoid or limit rate increases for a number of reasons, including affordability concerns, economic downturn, reliability and economic justice concerns, or decreased customer base, among others.
It also specifies an inflow and outflow rate method that must be implemented by the MPSC and provides federal funding for low-income distributed generation. FERC policy allows many customer-owned behind-the-meter and grid-connected distributed energy resources to participate in and receive revenue from wholesale electricity markets, as governed by evolving wholesale market rules subject to FERC oversight.
It also specifies an inflow and outflow rate method that must be implemented by the MPSC. FERC policy allows many customer-owned behind-the-meter and grid-connected distributed energy resources to participate in and receive revenue from wholesale electricity markets, as governed by evolving wholesale market rules subject to FERC oversight.
If the ROA limit were increased, this new ROA-like community solar system were allowed, or electric generation service in Michigan were deregulated, it could have a material adverse effect on CMS Energy and Consumers.
If the amount of ROA sales increased, this new ROA‑like community solar program were allowed, or electric generation service in Michigan were further deregulated, it could have a material adverse effect on CMS Energy and Consumers.
Unfavorable settlements of any of the issues related to these reserves or other tax matters at CMS Energy or Consumers could have a material adverse effect. Additionally, changes in federal, state, or local tax rates or other changes in tax laws could have adverse impacts.
Unfavorable settlements of any of the issues related to these reserves or other tax matters at CMS Energy or Consumers could have a material adverse effect. Additionally, changes in federal, state, or local tax rates or other changes in tax laws could have adverse impacts. In July 2025, President Trump signed the OBBBA into law.
If the MPSC determined that any of these contracts or related contracting policies were imprudent, recovery of these costs could be disallowed. CMS Energy and Consumers do not always hedge any or all of the exposure of their operations from commodity price volatility. Furthermore, the ability to hedge exposure to commodity price volatility depends on liquid commodity markets.
If the MPSC determined that any of these contracts or related contracting policies were imprudent, recovery of these costs could be disallowed. 49 Table of Contents CMS Energy and Consumers do not always hedge any or all of the exposure of their operations from commodity price volatility.
Utility regulation, state or federal legislation, and compliance could have a material adverse effect on CMS Energy’s and Consumers’ businesses. CMS Energy and certain of its subsidiaries, including Consumers, are subject to, or affected by, extensive utility regulation and state and federal legislation, including through application of policies and rules of numerous state and federal agencies and governmental entities.
CMS Energy and certain of its subsidiaries, including Consumers, are subject to, or affected by, extensive utility regulation and state and federal legislation and regulation, including through application of policies and rules of numerous state and federal agencies and governmental entities.
In addition, regulatory action on PFAS at the state and/or federal level could cause CMS Energy and Consumers to further test and remediate some sites if PFAS is present at certain levels.
In addition, regulatory action on PFAS at the state and/or federal level could cause CMS Energy and Consumers to further test and remediate some sites if PFAS is present at certain levels. Present and reasonably anticipated state and federal environmental statutes and regulations will continue to have a material effect on CMS Energy and Consumers.
Furthermore, any state or federal legislation concerning CMS Energy’s or Consumers’ operations could also have a material adverse effect. FERC, through NERC and its delegated regional entities, oversees reliability of certain portions of the electric grid. CMS Energy and Consumers cannot predict the impact of FERC orders or actions of NERC and its regional entities on electric system reliability.
Furthermore, any state or federal legislation, regulation, order, or other action concerning CMS Energy’s or Consumers’ operations could also have a material adverse effect. FERC, through NERC and its delegated regional entities, oversees reliability of certain portions of the electric grid.
Changes in laws that limit CMS Energy’s and Consumers’ ability to hedge could also have a negative effect on CMS Energy and Consumers. CMS Energy and Consumers might not be able to obtain an adequate supply of natural gas or coal, which could limit their ability to operate electric generation facilities or serve Consumers’ natural gas customers.
CMS Energy and Consumers might not be able to obtain an adequate supply of natural gas or coal, which could limit their ability to operate electric generation facilities or serve Consumers’ natural gas customers.
If one or more municipalities in Consumers’ service territory created a new or supplemental utility, or impaired the franchise under which Consumers serves customers in the municipality, it could have a material adverse effect on CMS Energy and Consumers. 40 Table of Contents Distributed energy resources could have a material adverse effect on CMS Energy’s and Consumers’ businesses.
Michigan law also allows municipalities to create, own, and operate 41 Table of Contents utilities. If one or more municipalities in Consumers’ service territory created a new or supplemental utility, or impaired the franchise under which Consumers serves customers in the municipality, it could have a material adverse effect on CMS Energy and Consumers.
As a result, to the extent the commodity markets are illiquid, CMS Energy and Consumers might not be able to execute their risk management strategies, which could result in larger unhedged positions than preferred at a given time. To the extent that unhedged positions exist, fluctuating commodity prices could have a negative effect on CMS Energy and Consumers.
Furthermore, the ability to hedge exposure to commodity price volatility depends on liquid commodity markets. As a result, to the extent the commodity markets are illiquid, CMS Energy and Consumers might not be able to execute their risk management strategies, which could result in larger unhedged positions than preferred at a given time.
Michigan law allows customers to use distributed energy resources for their electric energy needs. These distributed energy resources are connected to Consumers’ electric grid. The 2023 Energy Law increases the cap on distributed generation to ten percent of utilities’ peak loads.
Distributed energy resources could have a material adverse effect on CMS Energy’s and Consumers’ businesses. Michigan law allows customers to use distributed energy resources for their electric energy needs. These distributed energy resources are connected to Consumers’ electric grid. The 2023 Energy Law increases the cap on Consumers’ distributed generation program to 10 percent of utilities’ peak loads.
Failing to train replacement employees adequately and to transfer internal knowledge and expertise could adversely affect CMS Energy’s and Consumers’ ability to manage and operate their businesses. 49 Table of Contents Item 1B. Unresolved Staff Comments None.
Additionally, higher costs could result from the use of contractors to replace employees, loss of productivity, and safety incidents. Failing to train replacement employees adequately and to transfer internal knowledge and expertise could adversely affect CMS Energy’s and Consumers’ ability to manage and operate their businesses. Item 1B. Unresolved Staff Comments None.
No assurance can be made that these strategies will be successful in managing 47 Table of Contents CMS Energy’s and Consumers’ risk or that they will not result in net liabilities to CMS Energy or Consumers as a result of future volatility.
No assurance can be made that these strategies will be successful in managing CMS Energy’s and Consumers’ risk or that they will not result in net liabilities to CMS Energy or Consumers as a result of future volatility. A substantial portion of Consumers’ operating expenses for its electric generating plants and vehicle fleet consists of the costs of obtaining commodities.
Consumers routinely enters into contracts for natural gas to mitigate exposure to the risks of demand, market effects of weather, and changes in commodity prices associated with the gas distribution business. These contracts are executed in conjunction with the GCR mechanism, which is designed to allow Consumers to recover prudently incurred costs associated with its natural gas positions.
These contracts are executed in conjunction with the GCR mechanism, which is designed to allow Consumers to recover prudently incurred costs associated with its natural gas positions.
Failure to attract and retain an appropriately qualified workforce could adversely impact CMS Energy’s and Consumers’ results of operations. In some areas, competition for skilled employees is high and if CMS Energy and Consumers were unable to match skill sets to future needs, they could encounter operating challenges and increased costs.
In some areas, competition for skilled employees is high and if CMS Energy and Consumers were unable to match skill sets to future needs, they could encounter operating challenges and increased costs. These challenges could include a lack of resources, loss of knowledge, and delays in skill development.
A substantial portion of Consumers’ operating expenses for its electric generating plants and vehicle fleet consists of the costs of obtaining commodities. The contracts associated with Consumers’ fuel for electric generation and purchased power are executed in conjunction with the PSCR mechanism, which is designed to allow Consumers to recover prudently incurred costs associated with its positions in these commodities.
The contracts associated with Consumers’ fuel for electric generation and purchased power are executed in conjunction with the PSCR mechanism, which is designed to allow Consumers to recover prudently incurred costs associated with its positions in these commodities. If the MPSC determined that any of these contracts or related contracting policies were imprudent, recovery of these costs could be disallowed.
Present and reasonably anticipated state and federal environmental statutes and regulations will continue to have a material effect on CMS Energy and Consumers. 43 Table of Contents CMS Energy and Consumers have interests in fossil-fuel-fired power plants, other types of power plants, and natural gas systems that emit greenhouse gases.
CMS Energy and Consumers have interests in fossil-fuel-fired power plants, other types of power plants, and natural gas systems that emit greenhouse gases.
Achieving these plans depends on numerous factors, many of which are outside of their control. Consumers has announced a long-term strategy for delivering clean, reliable, resilient, and affordable energy, including a plan to end the use of coal in owned generation in 2025, and other subsidiaries of CMS Energy have plans to develop and operate clean energy assets.
Consumers has announced a long-term strategy for delivering clean, reliable, resilient, and affordable energy, and other subsidiaries of CMS Energy have plans to develop and operate clean energy assets.
A variety of technological tools and systems, including both company-owned information technology and technological services provided by outside parties, support critical functions. The failure of these technologies, including backup systems, or the inability of CMS Energy and Consumers to have these technologies supported, updated, expanded, or integrated into other technologies, could hinder their business operations.
The failure of these technologies, including backup systems, or the inability of CMS Energy and Consumers to have these technologies supported, updated, expanded, or integrated into other technologies, could hinder their business operations. 48 Table of Contents CMS Energy’s and Consumers’ businesses have liability risks.
A work interruption or other union actions could adversely affect Consumers. At December 31, 2024, unions represent 46 percent of Consumers’ employees. Consumers’ union agreements expire in 2025. If these employees were to engage in a strike, work stoppage, or other slowdown, Consumers could experience a significant disruption in its operations and higher ongoing labor costs.
If these employees were to engage in a strike, work stoppage, or other slowdown, CMS Energy or Consumers could experience a significant disruption in its operations and higher ongoing labor costs. Failure to attract and retain an appropriately qualified workforce could adversely impact CMS Energy’s and Consumers’ results of operations.
Alternatively, this rapid expansion of data centers and resulting increase in demand for electric power in MISO and in Consumers’ service territory may not develop as planned. CMS Energy and Consumers are subject to information security risks, risks of unauthorized access to their systems, and technology failures.
Alternatively, this rapid expansion of data centers and resulting increase in demand for electric power in MISO and in Consumers’ service territory may not develop as anticipated. Efforts to attract data center developers could be unsuccessful as other utilities and regions compete for these projects, which may limit future load growth.
At least one CMS Energy subsidiary participates in the wholesale electricity markets operated by ERCOT, over which FERC has limited control.
At least one CMS Energy subsidiary participates in the wholesale electricity markets operated by ERCOT, over which FERC has limited control. Consumers also faces regulatory uncertainty resulting from the U.S. Secretary of Energy’s emergency orders issued under the Federal Power Act and associated DOE regulations, which direct continued 42 Table of Contents operation of the J.H.
The Dodd-Frank Act provides for regulation by the Commodity Futures Trading Commission of certain commodity-related contracts.
This conclusion is subject to change as additional guidance or interpretations become available. 44 Table of Contents CMS Energy and its subsidiaries, including Consumers, must comply with the Dodd-Frank Act and its related regulations. The Dodd-Frank Act provides for regulation by the Commodity Futures Trading Commission of certain commodity-related contracts.
Removed
Michigan law also allows municipalities to create, own, and operate utilities.
Added
FERC issued an advance notice of proposed rulemaking in response to the Secretary of the DOE’s direction to FERC to consider the advance notice of proposed rulemaking as a means to standardize and expedite interconnection procedures and agreements for large electric loads.
Removed
The change in administration and the expiring tax cuts in the TCJA could result in changes to the renewable energy tax credits enacted in the Inflation Reduction Act of 2022. These changes could impact CMS Energy’s and Consumers’ clean energy efforts. CMS Energy and its subsidiaries, including Consumers, must comply with the Dodd-Frank Act and its related regulations.
Added
If FERC asserts jurisdiction over the distribution components of large-load customers’ interconnections to the transmission system, or allows large-load customers to directly purchase electricity from wholesale markets, it could have a material adverse effect on CMS Energy and Consumers.
Removed
CMS Energy’s and Consumers’ businesses have liability risks.
Added
Campbell, as well as similar prior or future executive actions, including the January 2025 and April 2025 executive orders related to energy supply and reliability. The Federal Power Act, DOE regulations, and U.S.
Removed
If the MPSC determined that any of these contracts or related contracting policies were imprudent, recovery of these costs could be disallowed. Natural gas prices in particular have been historically volatile.
Added
Secretary of Energy emergency orders all provide for cost recovery associated with continued operations, but there is not currently a FERC-approved MISO Tariff for recovery of compliance costs associated with the continued operation of J.H. Campbell, and continued operation of J.H. Campbell is not contemplated in Consumers’ current MPSC rates or rate filings at the MPSC.
Removed
These challenges could include a lack of resources, loss of knowledge, and delays in skill development. Additionally, higher costs could result from the use of contractors to replace employees, loss of productivity, and safety incidents.
Added
Consumers is pursuing cost recovery at FERC but cannot predict the outcome of those efforts or the impact of other executive actions.
Added
Utility regulation, state or federal legislation, regulation, and compliance could have a material adverse effect on CMS Energy’s and Consumers’ businesses.
Added
CMS Energy and Consumers have announced ambitious plans to reduce their impact on climate change and increase the reliability of their electric distribution system. Achieving these plans depends on numerous factors, many of which are outside of their control.
Added
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.
Added
There is not currently a FERC-approved MISO Tariff for recovery of compliance costs associated with the continued operation of J.H. Campbell, and continued operation of J.H. Campbell is not contemplated in Consumers’ current MPSC rates or rate filings at the MPSC.
Added
Consumers is pursuing cost recovery at FERC but cannot predict the outcome of those efforts or the impact of other executive actions.
Added
In addition, local zoning, permitting, land‑use constraints, and other external factors outside Consumers’ control could impede data center development. If these challenges arise and cannot be effectively mitigated, the anticipated benefits of data center load growth may not materialize.
Added
Further, even when data center customers enter into contracts to purchase utility service, there is a risk they may not fulfill their contractual or tariff obligations. CMS Energy and Consumers are subject to information security risks, risks of unauthorized access to their systems, and technology failures.
Added
A variety of technological tools and systems, including both company-owned IT and technological services provided by outside parties, support critical functions.
Added
Natural gas prices in particular have been historically volatile. Consumers routinely enters into contracts for natural gas to mitigate exposure to the risks of demand, market effects of weather, and changes in commodity prices associated with the gas distribution business.
Added
To the extent that unhedged positions exist, fluctuating commodity prices could have a negative effect on CMS Energy and Consumers. Changes in laws that limit CMS Energy’s and Consumers’ ability to hedge could also have a negative effect on CMS Energy and Consumers.
Added
A work interruption or other union actions could adversely affect CMS Energy and Consumers. At December 31, 2025, unions represent 45 percent of Consumers’ employees and 22 percent of NorthStar Clean Energy’s employees. Consumers’ union agreements expire in 2030 and the majority of NorthStar Clean Energy’s represented employees have an agreement that expires in 2029.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

8 edited+1 added−0 removed7 unchanged
Biggest changeThe companies’ electric, natural gas, and corporate systems each follow standards, controls, and requirements designed to maintain compliance with applicable regulations and standards, such as MPSC, NERC critical infrastructure protection, and payment card industry regulations. Technology projects and third-party service providers are reviewed for adherence to cybersecurity requirements.
Biggest changeAdditionally, the companies continuously upgrade technological investments designed to prevent, detect, and respond to attacks. The companies’ electric, natural gas, and corporate systems each follow standards, controls, and requirements designed to maintain compliance with applicable regulations and standards, such as MPSC, NERC critical infrastructure protection, and payment card industry regulations.
The Vice President of Information Technology and Security and CIO is responsible for informing the CEO and other members of senior management, as necessary, about cybersecurity incidents, covering prevention, detection, mitigation, and remediation efforts as they are detected by the cybersecurity team. Cybersecurity incidents are managed using the companies’ standard process for critical events.
The Vice President of IT and Security and CIO is responsible for informing the CEO and other members of senior management, as necessary, about cybersecurity incidents, covering prevention, detection, mitigation, and remediation efforts as they are detected by the cybersecurity team. Cybersecurity incidents are managed using the companies’ standard process for critical events.
The Audit Committee also reviews internal audit reports regarding cybersecurity processes, and receives updates that focus on CMS Energy’s and Consumers’ cybersecurity program, mitigation of cybersecurity risks, and assessments by third-party experts. Of note, two members of the Board have extensive industry experience in cybersecurity and are on CMS Energy’s and Consumers’ Audit Committee.
The Audit Committee also reviews internal audit reports regarding cybersecurity processes, and receives updates that focus on CMS Energy’s and Consumers’ cybersecurity program, mitigation of cybersecurity risks, and assessments by third-party experts. Of note, two members of the Board have extensive industry experience in cybersecurity and are on CMS Energy’s and Consumers’ Audit Committee. 52 Table of Contents
The enterprise risk management program is reviewed with the Board at least annually. Cybersecurity Program: CMS Energy’s and Consumers’ security function, led by the Vice President of Information Technology and Security and CIO, is accountable for cyber and physical security and is subject to various state, federal, and industry cybersecurity, physical security, and privacy regulations.
The enterprise risk management program is reviewed with the Board at least annually. Cybersecurity Program: CMS Energy’s and Consumers’ security function, led by the Vice President of IT and Security and CIO, is accountable for cyber and physical security and is subject to various state, federal, and industry cybersecurity, physical security, and privacy regulations.
In the event of such cybersecurity incidents, the Vice President of 50 Table of Contents Information Technology and Security and CIO communicates and collaborates with the officers of the companies and subject matter experts to address business continuity, contingency, and recovery plans. Senior management will notify the Board, including the Audit Committee, of any significant cybersecurity incidents.
In the event of such cybersecurity incidents, the Vice President of IT and Security and CIO communicates and collaborates with the officers of the companies and subject matter experts to address business continuity, contingency, and recovery plans. Senior management will notify the Board, including the Audit Committee, of any significant cybersecurity incidents.
CMS Energy’s and Consumers’ cybersecurity program focuses on finding and remediating vulnerabilities in their systems. The companies use third-party firms for penetration testing, audits, and assessments, and conduct technical exercises to practice their response to simulated events as well as tabletop exercises to test that response using their incident command system, including leadership decisions.
The companies use third-party firms for penetration testing, audits, and assessments, and conduct technical exercises to practice their response to simulated events as well as tabletop exercises to test that response using their incident command system, including leadership decisions.
Their cybersecurity program is responsible for assessing, identifying, and managing risks from cybersecurity threats using industry frameworks, as well as best practices developed by government and industry partners. All employees and contractors are required to complete annual trainings on a variety of security-related topics. Additionally, the companies continuously upgrade technological investments designed to prevent, detect, and respond to attacks.
Their cybersecurity program is responsible for assessing, identifying, and managing risks from cybersecurity threats using industry frameworks, as well as best practices developed by government and industry partners. All employees and contractors are required to complete annual trainings on a variety of security-related 51 Table of Contents topics.
Management’s Role: The Vice President of Information Technology and Security and CIO has over 25 years of information technology and security experience and, to enhance governance, reports to the Senior Vice President and General Counsel.
Management’s Role: The Vice President of IT and Security and CIO has over 25 years of IT and security experience and, to enhance governance, reports to the Executive Vice President of Business Transformation and Chief Legal and Administrative Officer.
Added
Technology projects and third-party service providers are reviewed for adherence to cybersecurity requirements. CMS Energy’s and Consumers’ cybersecurity program focuses on finding and remediating vulnerabilities in their systems.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings For information regarding CMS Energy’s and Consumers’ significant pending administrative and judicial proceedings involving regulatory, operating, transactional, environmental, and other matters, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2, Regulatory Matters and Note 3, Contingencies and Commitments.
Biggest changeItem 3. Legal Proceedings For information regarding CMS Energy’s and Consumers’ significant pending administrative and judicial proceedings involving regulatory, operating, transactional, environmental, and other matters, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Regulatory Matters and Note 4, Contingencies and Commitments.
CMS Energy, Consumers, and certain of their affiliates are also parties to routine lawsuits and administrative proceedings incidental to their businesses involving, for example, claims for personal injury and property damage, contractual matters, various taxes, and rates and licensing. Item 4. Mine Safety Disclosures Not applicable. 51 Table of Contents Part II
CMS Energy, Consumers, and certain of their affiliates are also parties to routine lawsuits and administrative proceedings incidental to their businesses involving, for example, claims for personal injury and property damage, contractual matters, various taxes, and rates and licensing. Item 4. Mine Safety Disclosures Not applicable. 53 Table of Contents Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+0 added−0 removed1 unchanged
Biggest changeComparison of Five ‑ year Cumulative Total Return Five-Year Cumulative Total Return Company/Index 2019 2020 2021 2022 2023 2024 CMS Energy $ 100 $ 100 $ 109 $ 110 $ 104 $ 123 S&P 500 Index 100 118 152 125 158 197 S&P 400 Utilities Index 100 86 103 103 89 117 These cumulative total returns assume reinvestments of dividends. 52 Table of Contents Consumers Consumers’ common stock is privately held by its parent, CMS Energy, and does not trade in the public market.
Biggest changeComparison of Five ‑ year Cumulative Total Return Five-year Cumulative Total Return Company/Index 2020 2021 2022 2023 2024 2025 CMS Energy $ 100 $ 110 $ 110 $ 104 $ 124 $ 134 S&P 500 Index 100 129 105 133 166 196 S&P 400 Utilities Index 100 120 120 104 136 164 These cumulative total returns assume reinvestments of dividends. 54 Table of Contents Consumers Consumers’ common stock is privately held by its parent, CMS Energy, and does not trade in the public market.
For additional information regarding securities authorized for issuance under equity compensation plans, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 11, Stock-based Compensation and Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. For additional information regarding dividends and dividend restrictions, see Item 8.
For additional information regarding securities authorized for issuance under equity compensation plans, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 12, Stock-based Compensation and Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. For additional information regarding dividends and dividend restrictions, see Item 8.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 4, Financings and Capitalization.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 5, Financings and Capitalization.
Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities CMS Energy CMS Energy’s common stock is traded on the New York Stock Exchange under the symbol CMS. At January 17, 2025, the number of registered holders of CMS Energy’s common stock totaled 24,092, based on the number of record holders.
Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities CMS Energy CMS Energy’s common stock is traded on the New York Stock Exchange under the symbol CMS. At January 16, 2026, the number of registered holders of CMS Energy’s common stock totaled 22,938, based on the number of record holders.
Unregistered Sales of Equity Securities None. Item 6. Reserved
Unregistered Sales of Equity Securities None. Item 6. Reserved 55 Table of Contents
Presented in the following table are CMS Energy’s repurchases of common stock for the three months ended December 31, 2024: Period Total Number of Shares Purchased Average Price Paid Per Share October 1, 2024 to October 31, 2024 202 $ 70.96 November 1, 2024 to November 30, 2024 348 68.42 December 1, 2024 to December 31, 2024 — — Total 550 $ 69.35 As of December 31, 2024, CMS Energy has no other publicly announced plans or programs that permit the repurchase of equity securities.
Presented in the following table are CMS Energy’s repurchases of common stock for the three months ended December 31, 2025: Period Total Number of Shares Purchased Average Price Paid Per Share October 1, 2025 to October 31, 2025 — $ — November 1, 2025 to November 30, 2025 132 73.99 December 1, 2025 to December 31, 2025 320 69.84 Total 452 $ 71.05 As of December 31, 2025, CMS Energy has no other publicly announced plans or programs that permit the repurchase of equity securities.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

148 edited+64 added−59 removed40 unchanged
Biggest changeFinancial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 19, Exit Activities and Asset Sales. 68 Table of Contents Financing Activities Presented in the following table are specific components of net cash provided by financing activities for 2024 versus 2023: In Millions CMS Energy, including Consumers Year Ended December 31, 2023 $ 1,143 Reasons for the change Lower debt issuances $ (1,589) Lower debt retirements 1,180 Higher repayments of notes payable (101) Higher issuances of common stock, primarily a higher settlement of forward sale contracts under the equity offering program 1 in 202 4 94 Higher payments of dividends on common stock (47) Absence of 2023 proceeds from sales of membership interests in VIEs to tax equity investors (86) Lower contributions from noncontrolling interest (1) Other financing activities, primarily lower debt issuance costs 21 Year Ended December 31, 2024 $ 614 Consumers Year Ended December 31, 2023 $ 767 Reasons for the change Lower debt issuances $ (1,369) Lower debt retirements 1,265 Higher repayments of notes payable (101) Absence of a repayment of borrowings from CMS Energy in 2023 75 Higher stockholder contribution from CMS Energy 260 Return of stockholder contribution to CMS Energy (320) Higher payments of dividends on common stock (100) Other financing activities 12 Year Ended December 31, 2024 $ 489 1 See Item 8.
Biggest changeFinancial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Regulatory Matters. 69 Table of Contents Investing Activities Presented in the following table are specific components of net cash used in investing activities for 2025 versus 2024: In Millions CMS Energy, including Consumers Year Ended December 31, 2024 $ (3,054) Reasons for the change Higher capital expenditures $ (806) Absence of proceeds from sale of ASP business in 2024 (124) Other investing activities, primarily higher cost to retire property (54) Year Ended December 31, 2025 $ (4,038) Consumers Year Ended December 31, 2024 $ (2,872) Reasons for the change Higher capital expenditures $ (472) Absence of proceeds from sale of ASP business in 2024 (124) Other investing activities, primarily higher cost to retire property (67) Year Ended December 31, 2025 $ (3,535) 70 Table of Contents Financing Activities Presented in the following table are specific components of net cash provided by financing activities for 2025 versus 2024: In Millions CMS Energy, including Consumers Year Ended December 31, 2024 $ 614 Reasons for the change Higher debt issuances $ 1,647 Higher debt retirements (198) Higher repayments of notes payable (37) Higher issuances of common stock 239 Higher payments of dividends on common stock (37) Proceeds from sale of membership interests in VIEs 59 Lower contributions from noncontrolling interest (1) Higher distributions to noncontrolling interest (2) Other financing activities, primarily higher debt issuance costs (44) Year Ended December 31, 2025 $ 2,240 Consumers Year Ended December 31, 2024 $ 489 Reasons for the change Lower debt issuances $ (174) Lower debt retirements 274 Higher repayments of notes payable (37) Borrowings from CMS Energy 340 Higher stockholder contribution from CMS Energy 185 Absence of return of stockholder contribution to CMS Energy in 2024 320 Higher payments of dividends on common stock (103) Other financing activities (5) Year Ended December 31, 2025 $ 1,289 71 Table of Contents Capital Resources and Liquidity CMS Energy and Consumers expect to have sufficient liquidity to fund their present and future commitments.
Consumers has historically been authorized to recover in electric rates costs related to coal ash disposal sites that supported power generation. Consumers has completed an assessment of inactive facilities as required by the 2024 CCR rule, and did not identify any legacy impoundments.
Consumers has historically been authorized to recover in electric rates costs related to coal ash disposal sites that supported power generation. Consumers completed an assessment of inactive facilities as required by the 2024 CCR rule, and did not identify any legacy impoundments.
In 2015, the EPA lowered the NAAQS for ozone and made it more difficult to construct or modify natural gas compressor stations and other emission sources in areas of the country that do not meet the ozone standard. As of May 2023, three counties in western Michigan have been designated as not meeting the ozone standard.
In 2015, the EPA lowered the NAAQS for ozone and made it more difficult to construct or modify natural gas compressor stations and other emission sources in areas of the country that do not meet the ozone standard. As of 2023, three counties in western Michigan have been designated as not meeting the ozone standard.
In 2015, the EPA lowered the NAAQS for ozone and made it more difficult to construct or modify power plants and other emission sources in areas of the country that do not meet the ozone standard. As of May 2023, three counties in western Michigan have been designated as not meeting the ozone standard.
In 2015, the EPA lowered the NAAQS for ozone and made it more difficult to construct or modify power plants and other emission sources in areas of the country that do not meet the ozone standard. As of 2023, three counties in western Michigan have been designated as not meeting the ozone standard.
Owners are required to conduct an evaluation at active facilities and any inactive facilities with at least one legacy impoundment to identify CCR management units and determine an appropriate course of action (closure, groundwater treatment, etc.) for each identified unit according to established compliance milestone schedules.
Owners are required to conduct an evaluation at active facilities or any inactive facilities with at least one legacy impoundment to identify CCR management units and determine an appropriate course of action (closure, groundwater treatment, etc.) for each identified unit according to established compliance milestone schedules.
A more detailed discussion of the factors affecting CMS Energy’s and Consumers’ performance can be found in the Results of Operations section that follows this Executive Overview. Over the next five years, Consumers expects weather-normalized electric deliveries to increase compared to 2024. This outlook reflects strong growth in electric demand, offset partially by the effects of energy waste reduction programs.
A more detailed discussion of the factors affecting CMS Energy’s and Consumers’ performance can be found in the Results of Operations section that follows this Executive Overview. Over the next five years, Consumers expects weather-normalized electric deliveries to increase compared to 2025. This outlook reflects strong growth in electric demand, offset partially by the effects of energy waste reduction programs.
CMS Energy believes the valuation allowances related to its deferred tax assets are adequate, but future results may include favorable or unfavorable adjustments. As a result, CMS Energy’s effective tax rate may fluctuate significantly over time. For additional details, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 12, Income Taxes.
CMS Energy believes the valuation allowances related to its deferred tax assets are adequate, but future results may include favorable or unfavorable adjustments. As a result, CMS Energy’s effective tax rate may fluctuate significantly over time. For additional details, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 13, Income Taxes.
In addition, Consumers’ ability to pay dividends is restricted by certain terms included in its articles of incorporation and potentially by FERC requirements and provisions under the Federal Power Act and the Natural Gas Act. For additional details on Consumers’ dividend restrictions, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 4, Financings and Capitalization—Dividend Restrictions.
In addition, Consumers’ ability to pay dividends is restricted by certain terms included in its articles of incorporation and potentially by FERC requirements and provisions under the Federal Power Act and the Natural Gas Act. For additional details on Consumers’ dividend restrictions, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 5, Financings and Capitalization—Dividend Restrictions.
Gas Environmental Outlook: Consumers expects to incur response activity costs at a number of sites, including 23 former MGP sites. For additional details, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Contingencies and Commitments—Consumers Gas Utility Contingencies. Consumers’ gas operations are subject to various federal, state, and local environmental laws and regulations.
Gas Environmental Outlook: Consumers expects to incur response activity costs at a number of sites, including 23 former MGP sites. For additional details, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 4, Contingencies and Commitments—Consumers Gas Utility Contingencies. Consumers’ gas operations are subject to various federal, state, and local environmental laws and regulations.
Pension and OPEB costs above or below the amounts used to set existing rates will be deferred as a regulatory asset or liability in accordance with Consumers’ postretirement benefits expense deferral mechanism; for more information, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2, Regulatory Matters.
Pension and OPEB costs above or below the amounts used to set existing rates will be deferred as a regulatory asset or liability in accordance with Consumers’ postretirement benefits expense deferral mechanism; for more information, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Regulatory Matters.
CMS Energy’s and Consumers’ businesses are affected primarily by: • regulation and regulatory matters • state and federal legislation • economic conditions • weather • energy commodity prices • interest rates • their securities’ credit ratings The Triple Bottom Line CMS Energy’s and Consumers’ purpose is to provide safe, reliable, affordable, clean, and equitable energy in service of their customers.
CMS Energy’s and Consumers’ businesses are affected primarily by: • regulation and regulatory matters • state and federal legislation • economic conditions • load growth • weather • energy commodity prices • interest rates • their securities’ credit ratings The Triple Bottom Line CMS Energy’s and Consumers’ purpose is to provide safe, reliable, affordable, clean, and equitable energy in service of their customers.
CMS Energy’s and Consumers’ present level of cash and expected cash flows from operating activities, together with access to sources of liquidity, are anticipated to be sufficient to fund contractual obligations and other material cash requirements for 2025 and beyond. Capital Expenditures: Over the next five years, CMS Energy and Consumers expect to make substantial capital investments.
CMS Energy’s and Consumers’ present level of cash and expected cash flows from operating activities, together with access to sources of liquidity, are anticipated to be sufficient to fund contractual obligations and other material cash requirements for 2026 and beyond. Capital Expenditures: Over the next five years, CMS Energy and Consumers expect to make substantial capital investments.
The peak demand for natural gas occurs in the winter due to colder temperatures and the resulting use of natural gas as heating fuel. Over the next five years, Consumers expects weather-normalized gas deliveries to remain stable relative to 2024. This outlook reflects modest growth in gas demand, offset by the effects of energy waste reduction programs.
The peak demand for natural gas occurs in the winter due to colder temperatures and the resulting use of natural gas as heating fuel. Over the next five years, Consumers expects weather-normalized gas deliveries to remain stable relative to 2025. This outlook reflects modest growth in gas demand, offset by the effects of energy waste reduction programs.
This evaluation could result in: • a change in Consumers’ fuel mix • changes in the types of generating units Consumers may purchase or build in the future • changes in how certain units are operated, including the installation of additional emission control equipment • the retirement, mothballing, or repowering with an alternative fuel of some of Consumers’ generating units • changes in Consumers’ environmental compliance costs • the purchase or sale of allowances Greenhouse Gases: There have been numerous legislative and regulatory initiatives at the state, regional, national, and international levels that involve the potential regulation and reporting of greenhouse gases.
This evaluation could result in: • a change in Consumers’ fuel mix • changes in the types of generating units Consumers may purchase or build in the future • changes in how certain units are operated, including the installation of additional emission control equipment • the retirement, mothballing, extended operation, or repowering with an alternative fuel of some of Consumers’ generating units • changes in Consumers’ environmental compliance costs • the purchase or sale of emission allowances Greenhouse Gases: There have been numerous legislative, executive, and regulatory initiatives at the state, regional, national, and international levels that involve the potential regulation and reporting of greenhouse gases.
Lowering the expected long-term rate of return on the assets of the DB Pension Plans by 25 basis points would increase estimated pension cost for 2025 by $8 million for both CMS Energy and Consumers. Lowering the PBO discount rates by 25 basis points would decrease estimated pension cost for 2025 by $1 million for both CMS Energy and Consumers.
Lowering the expected long-term rate of return on the assets of the DB Pension Plans by 25 basis points would increase estimated pension cost for 2026 by $8 million for both CMS Energy and Consumers. Lowering the PBO discount rates by 25 basis points would decrease estimated pension cost for 2026 by $1 million for both CMS Energy and Consumers.
Consumers may be required to: • replace equipment • install additional emission control equipment • purchase emission allowances or credits (including potential greenhouse gas offset credits) • curtail operations • arrange for alternative sources of supply • purchase or build facilities that generate fewer emissions • mothball, sell, or retire facilities that generate certain emissions • pursue energy efficiency or demand response measures more swiftly • take other steps to manage, sequester, or lower the emission of greenhouse gases Although associated capital or operating costs relating to greenhouse gas regulation or legislation could be material and cost recovery cannot be assured, Consumers expects to recover these costs in rates consistent with the recovery of other reasonable costs of complying with environmental laws and regulations.
Consumers may be required to: • replace equipment • install additional emission control equipment • purchase emission allowances or credits (including potential greenhouse gas offset credits) • curtail operations or modify existing facility retirement schedules • arrange for alternative sources of supply • purchase or build facilities that generate fewer emissions • mothball, sell, or retire facilities that generate certain emissions • pursue energy efficiency or demand response measures more swiftly • take other steps to manage, sequester, or lower the emission of greenhouse gases Although associated capital or operating costs relating to greenhouse gas regulation or legislation could be material and cost recovery cannot be assured, Consumers expects to recover these costs in rates consistent with the recovery of other reasonable costs of complying with environmental laws and regulations.
Consumers is unable to predict these events; however, Consumers evaluates the potential physical impacts of climate change on its operations, including increased frequency or intensity of storm activity; increased precipitation; increased temperature; and changes in lake and river levels. Consumers released a report addressing the physical risks of climate change on its infrastructure in 2022.
Consumers is unable to predict these events; however, Consumers evaluates the potential physical impacts of climate 81 Table of Contents change on its operations, including increased frequency or intensity of storm activity; increased precipitation; increased temperature; and changes in lake and river levels. Consumers released a report addressing the physical risks of climate change on its infrastructure in 2022.
The rule also sets out conditions under which some CCR units 79 Table of Contents would be forced to cease receiving CCRs and related process water and to initiate closure. Due to continued litigation, many aspects of the rule have been remanded to the EPA, resulting in more proposed and final rules.
The rule also sets out conditions under which some CCR units would be forced to cease receiving CCRs and related process water and to initiate closure. Due to continued litigation, many aspects of the rule have been remanded to the EPA, resulting in more proposed and final rules.
Based on recent data, the EPA reclassified these counties from “moderate” to “serious” nonattainment, which has more stringent requirements. One of Consumers’ compressor stations is in an ozone nonattainment area. Consequently, Consumers has initiated plans to retrofit equipment at this compressor station to lower NOx emissions.
Based on recent data, the EPA reclassified these counties from “moderate” to “serious” nonattainment, which has more stringent requirements. One of Consumers’ compressor stations is in a serious ozone nonattainment area. Consequently, Consumers has initiated plans to retrofit equipment at this compressor station to lower NOx emissions.
During 2024, owners and operators were required to assess if an inactive facility contains a legacy surface impoundment and then, for identified locations, proceed with the compliance schedule.
During 2024, owners and operators were required to assess whether an inactive facility contains a legacy surface impoundment and then, for identified locations, proceed with the compliance schedule.
Consumers’ 2025 contractual commitments comprise $2.1 billion of purchase obligations and $1.0 billion of principal and interest payments on long-term debt. Components of CMS Energy’s and Consumers’ cash management plan include controlling operating expenses and capital expenditures and evaluating market conditions for financing and refinancing opportunities.
Consumers’ 2026 contractual commitments comprise $2.1 billion of purchase obligations and $1.1 billion of principal and interest payments on long-term debt. Components of CMS Energy’s and Consumers’ cash management plan include controlling operating expenses and capital expenditures and evaluating market conditions for financing and refinancing opportunities.
While it has a large number of potential investment opportunities that would add customer value, Consumers has prioritized its spending based on the criteria of enhancing public safety, increasing reliability, maintaining affordability for its customers, and advancing its environmental stewardship.
While it has a large number of potential investment opportunities that would add customer value, Consumers has prioritized its spending based on 61 Table of Contents the criteria of enhancing public safety, increasing reliability, maintaining affordability for its customers, and advancing its environmental stewardship.
CMS Energy and Consumers consider all relevant factors in making these assessments. Accounting for the Effects of Industry Regulation: Because Consumers has regulated operations, it uses regulatory accounting to recognize the effects of the regulators’ decisions on its financial statements.
CMS Energy and Consumers consider all relevant factors in making these assessments. 88 Table of Contents Accounting for the Effects of Industry Regulation: Because Consumers has regulated operations, it uses regulatory accounting to recognize the effects of the regulators’ decisions on its financial statements.
While any resulting permitting and monitoring fees and/or restrictions on operations could impact Consumers’ existing and future operations, Consumers does not expect any material changes to its environmental strategy or Clean Energy Plan as a result of this rule. Additionally, Consumers regularly monitors proposed changes to the listing status of several species within its operational area.
While any resulting permitting and monitoring fees and/or restrictions on operations could impact Consumers’ existing and future operations, Consumers does not expect any material changes to its environmental strategy or Electric Supply Plan as a result of this rule. Additionally, Consumers regularly monitors proposed changes to the listing status of several species within its operational area.
During the year ended December 31, 2024, Consumers paid $795 million in dividends on its common stock to CMS Energy. Consumers uses cash flows generated from operations, external financing transactions, and the monetization of tax credits, along with stockholder contributions from CMS Energy, to fund capital expenditures, retire debt, pay dividends, and fund its other obligations.
During the year ended December 31, 2025, Consumers paid $898 million in dividends on its common stock to CMS Energy. Consumers uses cash flows generated from operations, external financing transactions, and the monetization of tax credits, along with stockholder contributions from CMS Energy, to fund capital expenditures, retire debt, pay dividends, and fund its other obligations.
Net-zero methane emissions from natural gas delivery system by 2030: Under its Methane Reduction Plan, Consumers plans to reduce methane emissions from its system by about 80 percent, from 2012 baseline levels, by accelerating the replacement of aging pipe, rehabilitating or retiring outdated infrastructure, and adopting new technologies and practices.
Under its Methane Reduction Plan, Consumers has set a goal of net-zero methane emissions from its natural gas delivery system by 2030. Consumers plans to reduce methane emissions from its system by about 80 percent from 2012 baseline levels by accelerating the replacement of aging pipe, rehabilitating or retiring outdated infrastructure, and adopting new technologies and practices.
Actual delivery levels will depend on: • energy conservation measures and results of energy waste reduction programs • weather fluctuations • Michigan’s economic conditions, including utilization, expansion, or contraction of large commercial and industrial facilities, economic development, population trends, electric vehicle adoption, and housing activity Electric ROA: Michigan law allows electric customers in Consumers’ service territory to buy electric generation service from alternative electric suppliers in an aggregate amount capped at ten percent of 75 Table of Contents Consumers’ sales, with certain exceptions.
Actual delivery levels will depend on: • energy conservation measures and results of energy waste reduction programs • weather fluctuations • Michigan’s economic conditions, including data center expansion; utilization, expansion, or contraction of large commercial and industrial facilities; economic development; population trends; electric vehicle adoption; and housing activity Electric ROA: Michigan law allows electric customers in Consumers’ service territory to buy electric generation service from alternative electric suppliers in an aggregate amount capped at 10 percent of Consumers’ sales, with certain exceptions.
In April 2024, the EPA finalized its rule under Section 111 of the Clean Air Act to address greenhouse gas emissions from new combustion turbine electric generating units and existing coal-, gas-, and oil-fueled steam electric generating units.
In April 2024, the EPA finalized its rule under Section 111 of the Clean Air Act to address greenhouse gas emissions from new combustion turbine electric generating units and existing coal-, gas-, and oil‑fueled steam electric generating units. These rules do not address existing combustion turbine electric generating units.
For additional information, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2, Regulatory Matters. Contingencies: CMS Energy and Consumers make judgments regarding the future outcome of various matters that give rise to contingent liabilities. For such matters, they record liabilities when they are considered probable and reasonably estimable, based on all available information.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Regulatory Matters. Contingencies: CMS Energy and Consumers make judgments regarding the future outcome of various matters that give rise to contingent liabilities. For such matters, they record liabilities when they are considered probable and reasonably estimable, based on all available information.
MPSC Distribution System Audit: In 2022, the MPSC ordered the state’s two largest electric utilities, including Consumers, to report on their compliance with regulations and past MPSC orders governing the utilities’ response to outages and downed lines.
MPSC Distribution System Audit: In 2022, the MPSC ordered the state’s two largest electric utilities, including Consumers, to report on their compliance with regulations and past MPSC orders governing the utilities’ response to outages and downed lines. Consumers responded to the MPSC’s order as directed.
Material Cash Requirements: Based on the present investment plan, during 2025, CMS Energy, including Consumers, projects capital expenditures of $4.3 billion and Consumers projects capital expenditures of $3.7 billion. CMS Energy’s 2025 contractual commitments comprise $2.4 billion of purchase obligations and $1.9 billion of principal and interest payments on long-term debt.
Material Cash Requirements: Based on the present investment plan, during 2026, CMS Energy, including Consumers, projects capital expenditures of $4.4 billion and Consumers projects capital expenditures of $4.1 billion. CMS Energy’s 2026 contractual commitments comprise $2.4 billion of purchase obligations and $1.8 billion of principal and interest payments on long-term debt.
For additional details on other electric environmental matters, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Contingencies and Commitments—Consumers Electric Utility Contingencies—Electric Environmental Matters. Consumers Gas Utility Outlook and Uncertainties Gas Deliveries: Consumers’ gas customer deliveries are seasonal.
For additional details on other electric environmental matters, see Item 8. Financial Statements 83 Table of Contents and Supplementary Data—Notes to the Consolidated Financial Statements—Note 4, Contingencies and Commitments—Consumers Electric Utility Contingencies—Electric Environmental Matters. Consumers Gas Utility Outlook and Uncertainties Gas Deliveries: Consumers’ gas customer deliveries are seasonal.
At December 31, 2024, Consumers had $119 million of consolidated cash and cash equivalents, which included $75 million of restricted cash and cash equivalents. For specific components of net cash provided by operating activities, net cash used in investing activities, and net cash provided by financing activities for 2023 versus 2022, see Item 7.
At December 31, 2025, Consumers had $111 million of consolidated cash and cash equivalents, which included $86 million of restricted cash and cash equivalents. For specific components of net cash provided by operating activities, net cash used in investing activities, and net cash provided by financing activities for 2024 versus 2023, see Item 7.
Consumers does not expect this rule to have significant impacts on its fossil-fuel-fired generating assets or its clean energy strategy. Consumers will continue to monitor NAAQS rulemakings and litigation to evaluate potential impacts to its generating assets.
Consumers does not have any fossil-fuel-fired generating assets in these counties and therefore does not expect this rule to have significant impacts on its existing generating assets or its clean energy strategy. Consumers will continue to monitor NAAQS rulemakings and litigation to evaluate potential impacts to its generating assets.
Additionally, to advance its environmental stewardship in Michigan and to minimize the impact of future regulations, Consumers set the following goals for the five-year period 2023 through 2027: • to enhance, restore, or protect 6,500 acres of land through 2027; Consumers has enhanced, restored, or protected more than 5,000 acres of land towards this goal • to reduce water usage by 1.7 billion gallons through 2027; Consumers has reduced water usage by more than 1.3 billion gallons towards this goal • to annually divert a minimum of 90 percent of waste from landfills (through waste reduction, recycling, and reuse); during 2024, Consumers’ rate of waste diverted from landfills was 92 percent CMS Energy and Consumers are monitoring numerous legislative, policy, and regulatory initiatives, including those to regulate and report greenhouse gases, and related litigation.
Additionally, to advance its environmental stewardship in Michigan and to minimize the impact of future regulations, Consumers set the following goals for the five‑year period 2023 through 2027: • to enhance, restore, or protect 6,500 acres of land through 2027; Consumers surpassed this goal during the three‑year period 2023 through 2025 and enhanced, restored, or protected 6,700 acres of land • to reduce water usage by 1.7 billion gallons through 2027; Consumers had reduced water usage by more than 1.9 billion gallons towards this goal • to annually divert a minimum of 90 percent of waste from landfills (through waste reduction, recycling, and reuse); during 2025, Consumers’ rate of waste diverted from landfills was 93 percent CMS Energy and Consumers are monitoring numerous legislative, policy, executive, and regulatory initiatives, including those related to regulation and reporting of greenhouse gases, and related litigation.
While Consumers cannot predict the outcome of changes in U.S. policy or of other legislative, executive, or regulatory initiatives involving the potential regulation or reporting of greenhouse gases, it intends to move forward with its Clean Energy Plan, its present net-zero goals, and its emphasis on reliable and resilient electric supply.
While Consumers cannot predict the outcome of changes in U.S. policy or of other legislative, executive, or regulatory initiatives involving the potential regulation or reporting of greenhouse gases, it intends to move forward with its compliance with Michigan’s clean energy requirements, its own sustainability goals, and its emphasis on reliable and resilient electric supply.
For additional details regarding certain legal matters, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2, Regulatory Matters and Note 3, Contingencies and Commitments. Critical Accounting Estimates The following information is important to understand CMS Energy’s and Consumers’ results of operations and financial condition. For additional accounting policies, see Item 8.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Regulatory Matters and Note 4, Contingencies and Commitments. Critical Accounting Estimates The following information is important to understand CMS Energy’s and Consumers’ results of operations and financial condition. For additional accounting policies, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 1, Significant Accounting Policies.
Consumers continually assesses whether future recovery of its regulatory assets is probable by 85 Table of Contents considering communications and experience with its regulators and changes in the regulatory environment. If Consumers determined that recovery of a regulatory asset were not probable, Consumers would be required to write off the asset and immediately recognize the expense in earnings.
Consumers continually assesses whether future recovery of its regulatory assets is probable by considering communications and experience with its regulators and changes in the regulatory environment. If Consumers determined that recovery of a regulatory asset were not probable, Consumers would be required to write off the asset and immediately recognize the expense in earnings. For additional information, see Item 8.
Each of the entities was in compliance with the covenants contained in their respective credit agreements as of December 31, 2024, as presented in the following table: Limit Actual CMS Energy, parent only Debt to capital 1 0.70 to 1.0 0.58 to 1.0 NorthStar Clean Energy, including subsidiaries Debt to capital 2 0.50 to 1.0 0.15 to 1.0 Debt service coverage 2 > 2.00 to 1.0 5.55 to 1.0 Pledged equity interests to aggregate commitment 2,3 > 2.00 to 1.0 2.64 to 1.0 Consumers Debt to capital 4 0.65 to 1.0 0.50 to 1.0 1 Applies to CMS Energy’s revolving credit agreement, letter of credit reimbursement agreement, and term loans. 2 Applies to NorthStar Clean Energy’s revolving credit agreement. 3 The aggregate book value of the pledged equity interests under the revolving credit agreement was at least two-times the aggregate commitment under the revolving credit agreement at December 31, 2024. 4 Applies to Consumers’ revolving credit agreements.
Each of the entities was in compliance with the covenants contained in their respective credit agreements as of December 31, 2025, as presented in the following table: Limit Actual CMS Energy, parent only Debt to capital 1 0.70 to 1.0 0.56 to 1.0 NorthStar Clean Energy Debt to capital 2 0.50 to 1.0 0.14 to 1.0 Debt service coverage 2 > 2.00 to 1.0 5.03 to 1.0 Pledged equity interests to aggregate commitment 2,3 > 2.00 to 1.0 2.06 to 1.0 Consumers Debt to capital 4 0.65 to 1.0 0.51 to 1.0 1 Applies to CMS Energy’s revolving credit agreement and letter of credit reimbursement agreement. 2 Applies to NorthStar Clean Energy’s revolving credit agreement. 3 The aggregate book value of the pledged equity interests under the revolving credit agreement was at least two‑times the aggregate commitment under the revolving credit agreement at December 31, 2025. 4 Applies to Consumers’ revolving credit agreements and certain letter of credit reimbursement agreements.
Presented in the 71 Table of Contents following table are CMS Energy’s and Consumers’ estimated capital expenditures, including lease commitments, for 2025 through 2029: In Billions 2025 2026 2027 2028 2029 Total CMS Energy, including Consumers Consumers $ 3.7 $ 4.1 $ 4.4 $ 3.9 $ 3.9 $ 20.0 NorthStar Clean Energy, including subsidiaries 0.6 0.3 0.7 0.6 0.6 2.8 Total CMS Energy $ 4.3 $ 4.4 $ 5.1 $ 4.5 $ 4.5 $ 22.8 Consumers Electric utility operations $ 2.5 $ 2.8 $ 3.1 $ 2.7 $ 2.6 $ 13.7 Gas utility operations 1.2 1.3 1.3 1.2 1.3 6.3 Total Consumers $ 3.7 $ 4.1 $ 4.4 $ 3.9 $ 3.9 $ 20.0 Other Material Cash Requirements: Presented in the following table are CMS Energy’s and Consumers’ material cash obligations from known contractual and other legal obligations: In Billions Payments Due December 31, 2024 Less Than One Year Total CMS Energy, including Consumers Long-term debt $ 1.2 $ 16.5 Interest payments on long-term debt 0.7 13.2 Purchase obligations 2.4 11.4 AROs — 2.6 Total obligations $ 4.3 $ 43.7 Consumers Long-term debt $ 0.5 $ 12.2 Interest payments on long-term debt 0.5 8.2 Purchase obligations 2.1 10.4 AROs — 2.5 Total obligations $ 3.1 $ 33.3 Purchase obligations arise from long-term contracts for the purchase of commodities and related services, and construction and service agreements.
Presented in the 73 Table of Contents following table are CMS Energy’s and Consumers’ estimated capital expenditures, including lease commitments, for 2026 through 2030: In Billions 2026 2027 2028 2029 2030 Total CMS Energy, including Consumers Consumers $ 4.1 $ 5.4 $ 5.7 $ 5.0 $ 3.9 $ 24.1 NorthStar Clean Energy 0.3 0.4 0.5 0.4 0.1 1.7 Total CMS Energy $ 4.4 $ 5.8 $ 6.2 $ 5.4 $ 4.0 $ 25.8 Consumers Electric utility operations $ 3.0 $ 4.1 $ 4.4 $ 3.5 $ 2.4 $ 17.4 Gas utility operations 1.1 1.3 1.3 1.5 1.5 6.7 Total Consumers $ 4.1 $ 5.4 $ 5.7 $ 5.0 $ 3.9 $ 24.1 Other Material Cash Requirements: Presented in the following table are CMS Energy’s and Consumers’ material cash obligations from known contractual and other legal obligations: In Billions Payments Due December 31, 2025 Less Than One Year Total CMS Energy, including Consumers Long-term debt $ 1.0 $ 18.9 Interest payments on long-term debt 0.8 15.1 Purchase obligations 2.4 20.6 AROs 0.1 2.7 Total obligations $ 4.3 $ 57.3 Consumers Long-term debt $ 0.6 $ 13.2 Interest payments on long-term debt 0.5 8.0 Purchase obligations 2.1 19.7 AROs 0.1 2.6 Total obligations $ 3.3 $ 43.5 Purchase obligations arise from long-term contracts for the purchase of commodities and related services, primarily long-term PPAs, and construction and service agreements.
CMS Energy’s and Consumers’ financial strength allows them to maintain solid investment-grade credit ratings and thereby reduce funding costs for the benefit of customers and investors, to attract and retain talent, and to reinvest in the communities they serve. In 2024, CMS Energy’s net income available to common stockholders was $993 million, and diluted EPS were $3.33.
CMS Energy’s and Consumers’ financial strength allows them to maintain solid investment-grade credit ratings and thereby reduce funding costs for the benefit of customers and investors, to attract and retain talent, and to reinvest in the communities they serve. 60 Table of Contents In 2025, CMS Energy’s net income available to common stockholders was $1.1 billion, and diluted EPS were $3.53.
For additional details on this program, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 19, Exit Activities and Asset Sales. Electric Environmental Outlook: Consumers’ electric operations are subject to various federal, state, and local environmental laws and regulations.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 20, Exit Activities and Asset Sales. For additional details on the emergency orders, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Regulatory Matters. Electric Environmental Outlook: Consumers’ electric operations are subject to various federal, state, and local environmental laws and regulations.
Consumers estimates that it will incur capital expenditures of $240 million from 2025 through 2029 to continue to comply with RCRA, the Clean Air Act, and numerous other environmental regulations. Consumers expects to recover these costs in customer rates, but cannot guarantee this result.
Consumers estimates that it will incur capital expenditures of $245 million from 2026 through 2030 to continue to comply with RCRA, the Clean Air Act, and numerous other environmental regulations. Consumers expects to recover these costs in customer rates, but cannot guarantee this result. Multiple environmental laws and regulations are subject to litigation.
Central to Consumers’ commitment to its customers are the initiatives it has undertaken to keep electricity and natural gas affordable, including: • replacement of coal-fueled generation and PPAs with a cost-efficient mix of renewable energy, less-costly dispatchable generation sources, and energy waste reduction and demand response programs • targeted infrastructure investment to reduce maintenance costs and improve reliability and safety • supply chain optimization • economic development to increase sales and reduce overall rates • information and control system efficiencies • employee and retiree health care cost sharing • tax planning • cost-effective financing • workforce productivity enhancements While CMS Energy and Consumers have experienced some supply chain disruptions and inflationary pressures, they have taken steps to mitigate the impact on their ability to provide safe and reliable service to customers. 55 Table of Contents Planet: The planet element of the triple bottom line represents CMS Energy’s and Consumers’ commitment to protect the environment.
Central to Consumers’ commitment to its customers are the initiatives it has undertaken to keep electricity and natural gas affordable, including: • replacement of coal-fueled generation and PPAs with a cost-efficient and reliable mix of renewable energy, less-costly dispatchable generation sources, and energy waste reduction and demand response programs • targeted infrastructure investment to reduce maintenance costs and improve reliability and safety • supply chain optimization • economic development to increase sales and reduce overall rates • information and control system efficiencies • employee and retiree health care cost sharing • tax planning • cost-effective financing • workforce productivity enhancements While inflationary pressures and tariffs could impact supply chain availability and pricing, CMS Energy and Consumers are taking steps to help mitigate the impact on their ability to provide safe, reliable, affordable, clean, and equitable energy in service of their customers.
This compares with net income available to common stockholders of $877 million and diluted EPS of $3.01 in 2023. In 2024, electric and gas rate increases were offset partially by higher interest charges and increased depreciation and property taxes, reflecting higher capital spending.
This compares with net income available to common stockholders of $993 million and diluted EPS of $3.33 in 2024. In 2025, higher gas and electric sales, due primarily to favorable weather, and electric and gas rate increases were offset partially by increased depreciation and property taxes, reflecting higher capital spending, and higher interest charges.
The approved rate increase is based on a 9.9‑percent authorized return on equity. The new rates became effective March 15, 2024. 2024 Gas Rate Case: 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.
The new rates became effective in November 2025. 2025 Gas Rate Case: In December 2025, Consumers filed an application with the MPSC seeking an annual rate increase of $240 million based on a 10.25‑percent authorized return on equity for the projected 12‑month period ending October 31, 2027.
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.
First, Consumers requested a $436 million annual rate increase, based on a 10.25‑percent authorized return on equity for the projected 12 ‑ month period ending April 30, 2027. The filing requested authority to recover costs related to new infrastructure investment primarily in distribution system reliability.
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.
First, Consumers requested a $436 million annual rate increase, based on a 10.25‑percent authorized return on equity for the projected 12 ‑ month period ending April 30, 2027. The filing requested authority to recover costs related to new infrastructure investment primarily in distribution system reliability.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2, Regulatory Matters and Note 3, Contingencies and Commitments. Consumers Electric Utility Outlook and Uncertainties Energy Transformation: Consumers’ Clean Energy Plan details its long-term strategy for delivering safe, reliable, affordable, clean, and equitable energy to its customers.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Regulatory Matters and Note 4, Contingencies and Commitments. Consumers Electric Utility Outlook and Uncertainties Energy Supply: Consumers’ Electric Supply Plan, its long-term strategy for delivering safe, reliable, affordable, clean, and equitable energy to its customers, is outlined in its integrated resource plan and incorporates Consumers’ Renewable Energy Plan.
At December 31, 2024, electric deliveries under the ROA program were at the ten‑percent limit. Fewer than 300 of Consumers’ electric customers purchased electric generation service under the ROA program. In 2016, Michigan law established a path to ensure that forward capacity is secured for all electric customers in Michigan, including customers served by alternative electric suppliers under ROA.
Fewer than 300 of Consumers’ electric customers purchased electric generation service under the ROA program. 77 Table of Contents In 2016, Michigan law established a path to ensure that forward capacity is secured for all electric customers in Michigan, including customers served by alternative electric suppliers under ROA.
The EPA regulates cooling water intake systems of existing electric generating plants under Section 316(b) of the Clean Water Act. The rules seek to reduce alleged harmful impacts on aquatic organisms, such as fish. In 2018, Consumers submitted to EGLE studies and recommended plans to comply with Section 316(b) for its coal-fueled units but has not yet received final approval.
The rules seek to reduce alleged harmful impacts on aquatic organisms, such as fish. In 2018, Consumers submitted to EGLE studies and recommended plans to comply with Section 316(b) for its coal-fueled units but has not yet received final approval. The EPA also regulates the discharge of wastewater through its effluent limitation guidelines for steam electric generating plants.
The CE Way is an important means of realizing CMS Energy’s and Consumers’ purpose of providing safe, reliable, affordable, clean, and equitable energy in service of their customers. 61 Table of Contents Results of Operations CMS Energy Consolidated Results of Operations In Millions, Except Per Share Amounts Years Ended December 31 2024 2023 Change Net Income Available to Common Stockholders $ 993 $ 877 $ 116 Basic Earnings Per Average Common Share $ 3.34 $ 3.01 $ 0.33 Diluted Earnings Per Average Common Share $ 3.33 $ 3.01 $ 0.32 In Millions Years Ended December 31 2024 2023 Change Electric utility $ 681 $ 550 $ 131 Gas utility 328 315 13 NorthStar Clean Energy 63 67 (4) Corporate interest and other (79) (55) (24) Net Income Available to Common Stockholders $ 993 $ 877 $ 116 For a summary of net income available to common stockholders for 2023 versus 2022, as well as detailed changes by reportable segment, see Item 7.
The CE Way is an important means of realizing CMS Energy’s and Consumers’ purpose of providing safe, reliable, affordable, clean, and equitable energy in service of their customers. 63 Table of Contents Results of Operations CMS Energy Consolidated Results of Operations In Millions, Except Per Share Amounts Years Ended December 31 2025 2024 Change Net Income Available to Common Stockholders $ 1,061 $ 993 $ 68 Basic Earnings Per Average Common Share $ 3.53 $ 3.34 $ 0.19 Diluted Earnings Per Average Common Share $ 3.53 $ 3.33 $ 0.20 In Millions Years Ended December 31 2025 2024 Change Electric utility $ 719 $ 681 $ 38 Gas utility 409 328 81 NorthStar Clean Energy 71 63 8 Corporate interest and other (138) (79) (59) Net Income Available to Common Stockholders $ 1,061 $ 993 $ 68 For a summary of net income available to common stockholders for 2024 versus 2023, as well as detailed changes by reportable segment, see Item 7.
The amount recorded for any contingency may differ from actual costs incurred when the contingency is resolved. For additional details, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Contingencies and Commitments. Derivative Instruments: CMS Energy and Consumers account for certain contracts as derivative instruments.
The amount recorded for any contingency may differ from actual costs incurred when the contingency is resolved. For additional details, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 4, Contingencies and Commitments.
This regulation or others, if adopted, may involve requirements to reduce methane emissions from Consumers’ gas utility operations and carbon dioxide emissions from customer use of natural gas. Consumers will continue to monitor this proposed rule for potential impacts.
Future regulations, if adopted, may involve requirements to reduce methane emissions from Consumers’ gas utility operations and carbon dioxide emissions from customer use of natural gas. Consumers will continue to monitor such potential rules for impacts.
Looking Forward CMS Energy and Consumers will continue to consider the impact on the triple bottom line of people, planet, and prosperity in their daily operations as well as in their long-term strategic decisions.
The MPSC must issue a final order in this case before or in October 2026. Looking Forward CMS Energy and Consumers will continue to consider the impact on the triple bottom line of people, planet, and prosperity in their daily operations as well as in their long-term strategic decisions.
Consumers responded to the MPSC’s order as directed. 76 Table of Contents Additionally, as directed by the MPSC, the MPSC Staff engaged a third‑party auditor to review all equipment and operations of the two utilities’ distribution systems. In September 2024, the MPSC Staff released the third-party auditor’s final report on its audit of Consumers’ distribution system.
Additionally, as directed by the MPSC, the MPSC Staff engaged a third‑party auditor to review all equipment and operations of the two utilities’ distribution systems. In September 2024, the MPSC Staff released the third-party auditor’s final report on its audit of Consumers’ distribution system. The report included several recommendations to improve Consumers’ distribution system and associated processes and procedures.
Failure of EGLE to renew any NPDES permit, a successful appeal against a permit, a change in the interpretation or 84 Table of Contents scope of NPDES permitting, or onerous terms contained in a permit could have a significant detrimental effect on the operations of a facility.
Consumers applies for renewal of these permits every five years. Failure of EGLE to renew any NPDES permit, a successful appeal against a permit, a change in the interpretation or scope of NPDES permitting, or onerous terms contained in a permit could have a significant detrimental effect on the operations of a facility.
The complaint requests the federal court to issue a permanent injunction prohibiting the MPSC from implementing a local clearing requirement on individual electric providers. In February 2023, the U.S. District Court for the Eastern District of Michigan dismissed the complaint.
The complaint requested the federal court to issue a permanent injunction prohibiting the MPSC from implementing a local clearing requirement on individual electric providers. In 2023, the U.S. District Court for the Eastern District of Michigan dismissed the complaint. ABATE and the other intervenor filed a claim of appeal of the Eastern District Court’s decision with the U.S.
NorthStar Clean Energy, through its subsidiaries and equity investments, is engaged in domestic independent power production, including the development and operation of renewable generation, and the marketing of independent power production. 53 Table of Contents CMS Energy and Consumers manage their businesses by the nature of services each provides.
Consumers’ customer base consists of a mix of primarily residential, commercial, and diversified industrial customers. NorthStar Clean Energy, through its subsidiaries and equity investments, is engaged in domestic independent power production, including the development and operation of renewable generation, and the marketing of independent power production. CMS Energy and Consumers manage their businesses by the nature of services each provides.
For additional details on postretirement benefits, including the fair value measurements for the assets of the DB Pension Plans and OPEB Plan, see Item 8.
For additional details on postretirement benefits, including the fair value measurements for the assets of the DB Pension Plans and OPEB Plan, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 11, Retirement Benefits.
The calculation of the liabilities and associated expenses requires the expertise of actuaries, and requires many assumptions, including: • life expectancies • discount rates • expected long-term rate of return on plan assets • rate of compensation increases • expected health care costs A change in these assumptions could change significantly CMS Energy’s and Consumers’ recorded liabilities and associated expenses.
The calculation of the liabilities and associated expenses requires the expertise of actuaries, and requires many assumptions, including: • life expectancies • discount rates • expected long-term rate of return on plan assets • rate of compensation increases • expected health care costs A change in these assumptions could change significantly CMS Energy’s and Consumers’ recorded liabilities and associated expenses. 89 Table of Contents Presented in the following table are estimates of credits and cash contributions through 2028 for the DB Pension Plans and OPEB Pl an.
Trends, uncertainties, and other matters related to NorthStar Clean Energy that could have a material impact on CMS Energy’s consolidated income, cash flows, or financial position include: • investment in and financial benefits received from renewable energy and energy storage projects, including changes to renewable energy tax credits • changes in energy and capacity prices • severe weather events and climate change associated with increasing levels of greenhouse gases • changes in commodity prices on certain derivative contracts that do not qualify for hedge accounting and must be marked to market through earnings • changes in various environmental laws, regulations, principles, or practices, or in their interpretation • indemnity obligations assumed in connection with ownership interests in facilities that involve tax equity financing • representations, warranties, and indemnities provided by CMS Energy in connection with sales of assets • delays or difficulties in obtaining environmental permits for facilities located in areas associated with environmental justice concerns For additional details regarding NorthStar Clean Energy’s uncertainties, see Item 8.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 19, Variable Interest Entities. 86 Table of Contents Trends, uncertainties, and other matters related to NorthStar Clean Energy that could have a material impact on CMS Energy’s consolidated income, cash flows, or financial position include: • investment in and financial benefits received from renewable energy and energy storage projects, including changes to tax and trade policy • delays or difficulties in financing, constructing, and developing projects, including those arising from the performance of contractors, suppliers, or other counterparties • changes in energy, capacity, and other commodity prices • severe weather events and climate change associated with increasing levels of greenhouse gases • changes in various environmental laws, regulations, principles, or practices, or in their interpretation • indemnity obligations assumed in connection with ownership interests in facilities that involve tax equity financing • representations, warranties, and indemnities provided in connection with sales of assets • delays or difficulties in obtaining environmental permits For additional details regarding NorthStar Clean Energy’s uncertainties, see Item 8.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2, Regulatory Matters. 65 Table of Contents NorthStar Clean Energy Results of Operations Presented in the following table are the detailed changes to NorthStar Clean Energy’s net income available to common stockholders for 2024 versus 2023: In Millions Year Ended December 31, 2023 $ 67 Reason for the change Higher operating earnings, primarily at DIG $ 22 Higher renewable energy tax credits 9 Higher interest charges and other expenses (11) Lower earnings from renewable projects (24) Year Ended December 31, 2024 $ 63 Corporate Interest and Other Results of Operations Presented in the following table are the detailed changes to corporate interest and other results for 2024 versus 2023: In Millions Year Ended December 31, 2023 $ (55) Reasons for the change Lower gain on extinguishment of debt 1 $ (21) Other (3) Year Ended December 31, 2024 $ (79) 1 See Item 8.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 13, Income Taxes. 67 Table of Contents NorthStar Clean Energy Results of Operations Presented in the following table are the detailed changes to NorthStar Clean Energy’s net income available to common stockholders for 2025 versus 2024: In Millions Year Ended December 31, 2024 $ 63 Reason for the change Higher renewable earnings primarily driven by new project development $ 26 Lower other expenses 7 Higher tax expenses (3) Lower operating earnings, due primarily to planned major outage at DIG (22) Year Ended December 31, 2025 $ 71 Corporate Interest and Other Results of Operations Presented in the following table are the detailed changes to corporate interest and other results for 2025 versus 2024: In Millions Year Ended December 31, 2024 $ (79) Reasons for the change Higher interest charges $ (61) Lower gains on extinguishment of debt 1 (38) Higher interest earnings and other 21 Lower tax expense 19 Year Ended December 31, 2025 $ (138) 1 See Item 8.
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.
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, 2025, there were no commercial paper notes outstanding under this program.
Thus, customers can reduce their electric bills by shifting their consumption from on‑peak to off‑peak times. Over the next five years, Consumers expects weather-normalized electric deliveries to increase compared to 2024. This outlook reflects strong growth in electric demand, offset partially by the effects of energy waste reduction programs.
Over the next five years, Consumers expects weather-normalized electric deliveries to increase compared to 2025. This outlook reflects strong growth in electric demand, offset partially by the effects of energy waste reduction programs.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 12, Income Taxes. 64 Table of Contents Consumers Gas Utility Results of Operations Presented in the following table are the detailed changes to the gas utility’s net income available to common stockholders for 2024 versus 2023: In Millions Year Ended December 31, 2023 $ 315 Reasons for the change Gas deliveries 1 and rate increases Rate increase $ 75 Lower revenue due primarily to unfavorable weather (35) Lower ASP business revenue 2 (46) ASP gain customer bill credit 3 (8) Lower energy waste reduction program revenues (8) $ (22) Maintenance and other operating expenses Lower ASP business expense 2 39 Amortization of ASP gain 3 17 Absence of 2023 voluntary separation program expenses 13 Lower energy waste reduction program costs 8 Higher maintenance and other operating expenses (20) 57 Depreciation and amortization Lower depreciation rates, offset partially by higher capital spending 13 General taxes Higher property taxes, reflecting higher capital spending and other (12) Other income, net of expenses 9 Interest charges (31) Income taxes Higher gas utility pre-tax earnings (4) Lower other income taxes 3 (1) Year Ended December 31, 2024 $ 328 1 Deliveries to end-use customers were 268 Bcf in 2024 and 282 Bcf in 2023. 2 See Item 8.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 13, Income Taxes. 66 Table of Contents Consumers Gas Utility Results of Operations Presented in the following table are the detailed changes to the gas utility’s net income available to common stockholders for 2025 versus 2024: In Millions Year Ended December 31, 2024 $ 328 Reasons for the change Gas deliveries 1 and rate increases Rate increase $ 60 Higher revenue due primarily to the absence of 2024 unfavorable weather 155 Higher energy waste reduction program revenues 16 Absence of ASP business revenue 2 (19) ASP gain customer bill credit 2 (20) Lower other revenues (3) $ 189 Maintenance and other operating expenses Amortization of ASP gain 2 30 Absence of 2024 ASP business expense 2 14 Higher energy waste reduction program costs (16) Impairment of project development assets (15) Higher IT expenses, including early-phase ERP implementation costs (8) Higher maintenance and other operating expenses (19) (14) Depreciation and amortization Increased plant in service, reflecting higher capital spending (25) General taxes Higher property taxes, reflecting higher capital spending (13) Other income, net of expenses (3) Interest charges (14) Income taxes Higher gas utility pre-tax earnings (31) Absence of 2024 deferred tax liability reversals (5) State deferred tax remeasurement 3 (4) Lower other income taxes 1 (39) Year Ended December 31, 2025 $ 409 1 Deliveries to end-use customers were 311 Bcf in 2025 and 268 Bcf in 2024. 2 See Item 8.
Consumers plans to reduce methane emissions from its system by about 80 percent, from 2012 baseline levels, by accelerating the replacement of aging pipe, rehabilitating or retiring outdated infrastructure, and adopting new technologies and practices. The remaining emissions will likely be offset by purchasing and/or producing renewable natural gas. To date, Consumers has reduced methane emissions by nearly 30 percent.
Consumers plans to reduce methane emissions from its system by about 80 percent from 2012 baseline levels by accelerating the replacement of aging pipe, rehabilitating or retiring outdated infrastructure, and adopting new technologies and practices. The remaining emissions will likely be offset through clean fuel alternatives or nature-based carbon removal pathways.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Contingencies and Commitments—Guarantees. For additional details on letters of credit and CMS Energy’s forward sales contracts, see 72 Table of Contents Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 4, Financings and Capitalization.
These arrangements include indemnities, surety bonds, letters of credit, and financial and performance guarantees. For additional details on indemnity and guarantee arrangements, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 4, Contingencies and Commitments—Guarantees. For additional details on letters of credit and CMS Energy’s forward sales contracts, see Item 8.
Electric distribution and other projects comprise $8.5 billion primarily to strengthen circuits and substations, replace poles, and interconnect clean energy resources. The gas infrastructure projects comprise $6.3 billion to sustain deliverability, enhance pipeline integrity and safety, and reduce methane emissions. Consumers also expects to spend $5.2 billion on clean generation, which includes investments in wind, solar, and hydroelectric generation resources.
Electric distribution and other projects comprise $8.6 billion primarily to strengthen circuits and substations, replace poles, and interconnect clean energy resources. The gas infrastructure projects comprise $6.7 billion to sustain deliverability, enhance pipeline integrity and safety, and reduce methane emissions.
In March 2023, ABATE and the other intervenor filed a claim of appeal of the Eastern District Court’s decision with the U.S. Court of Appeals for the Sixth Circuit. In January 2025, the Sixth Circuit Court of Appeals issued an opinion finding that the MPSC’s imposition of a local clearing requirement on individual electric suppliers would discriminate against interstate commerce.
Court of Appeals for the Sixth Circuit. In January 2025, the Sixth Circuit Court of Appeals issued an opinion finding that the MPSC’s imposition of a local clearing requirement on individual electric suppliers would discriminate against interstate commerce.
In Millions DB Pension Plans OPEB Plan Credit Contribution Credit Contribution CMS Energy, including Consumers 2025 $ (70) $ — $ (91) $ — 2026 (68) — (94) — 2027 (62) — (84) — Consumers 1 2025 $ (65) $ — $ (84) $ — 2026 (64) — (87) — 2027 (57) — (77) — 1 Consumers’ pension and OPEB costs are recoverable through its general ratemaking process.
In Millions DB Pension Plans OPEB Plan Credit Contribution Credit Contribution CMS Energy, including Consumers 2026 $ (86) $ — $ (109) $ — 2027 (87) — (99) — 2028 (100) — (92) — Consumers 1 2026 $ (81) $ — $ (101) $ — 2027 (81) — (91) — 2028 (94) — (84) — 1 Consumers’ pension and OPEB costs are recoverable through its general ratemaking process.
Although associated capital or operating and maintenance costs relating to these regulations could be material and cost recovery cannot be assured, Consumers expects to recover such costs in rates consistent with the recovery of other reasonable costs of complying with laws and regulations.
Under the proposed rules, Consumers will incur increased capital and increased operating and maintenance costs to install and remediate pipelines and to expand inspections, maintenance, and monitoring of existing pipelines and storage facilities. 84 Table of Contents Although associated capital or operating and maintenance costs relating to these regulations could be material and cost recovery cannot be assured, Consumers expects to recover such costs in rates consistent with the recovery of other reasonable costs of complying with laws and regulations.
Consumers has submitted timely NPDES permit applications and will be working with EGLE to incorporate applicable provisions during the permit renewal process. 80 Table of Contents Many of Consumers’ facilities maintain NPDES permits, which are vital to the facilities’ operations. Consumers applies for renewal of these permits every five years.
Consumers has submitted the appropriate notices of planned participation in compliance with this rule. Consumers has also submitted timely NPDES permit applications and will be working with EGLE to incorporate applicable provisions during the permit renewal process. Many of Consumers’ facilities maintain NPDES permits, which are vital to the facilities’ operations.
CMS Energy and Consumers measure their progress toward the purpose by considering their impact on the “triple bottom line” of people, planet, and prosperity; this consideration takes into account not only the economic value that CMS Energy and Consumers create for customers and investors, but also their responsibility to social and environmental goals.
In support of this purpose, CMS Energy and Consumers couple digital transformation with the “CE Way,” a lean operating system designed to improve safety, quality, cost, delivery, and employee morale. 56 Table of Contents CMS Energy and Consumers measure their progress toward the purpose by considering their impact on the “triple bottom line” of people, planet, and prosperity; this consideration takes into account not only the economic value that CMS Energy and Consumers create for customers and investors, but also their responsibility to social and environmental goals.
Consumers’ investment program, which is subject to approval through general rate case and other MPSC proceedings, is expected to result in annual rate-base growth of more than eight percent.
Consumers’ investment program, which is subject to approval through general rate case and other MPSC proceedings, is expected to result in annual rate-base growth of more than 8 percent. This rate-base growth, together with cost-control measures, should allow Consumers to maintain affordable customer prices.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 4, Financings and Capitalization. Cash Position, Investing, and Financing At December 31, 2024, CMS Energy had $178 million of consolidated cash and cash equivalents, which included $75 million of restricted cash and cash equivalents.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 5, Financings and Capitalization—CMS Energy’s Purchase of Consumers’ First Mortgage Bonds. 68 Table of Contents Cash Position, Investing, and Financing At December 31, 2025, CMS Energy had $615 million of consolidated cash and cash equivalents, which included $106 million of restricted cash and cash equivalents.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2, Regulatory Matters. 63 Table of Contents Consumers Electric Utility Results of Operations Presented in the following table are the detailed changes to the electric utility’s net income available to common stockholders for 2024 versus 2023: In Millions Year Ended December 31, 2023 $ 550 Reasons for the change Electric deliveries 1 and rate increases Rate increase, including securitization surcharge and return on higher renewable capital spending $ 235 Higher revenue due primarily to favorable weather 45 Higher energy waste reduction program revenues 10 $ 290 Maintenance and other operating expenses Lower service restoration costs 32 Absence of 2023 voluntary separation program expenses 20 Higher distribution, transmission, and generation expenses (15) Higher energy waste reduction program costs (10) Higher other maintenance and operating expenses (18) 9 Depreciation and amortization Increased plant in service, reflecting higher capital spending (68) General taxes Higher property taxes, reflecting higher capital spending (21) Other income, net of expenses (5) Interest charges (39) Income taxes Higher electric utility pre-tax earnings (41) Higher renewable energy tax credits 2 11 Higher other income taxes (5) (35) Year Ended December 31, 2024 $ 681 1 Deliveries to end-use customers were 36.8 billion kWh in 2024 and 36.3 billion kWh in 2023. 2 See Item 8.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Regulatory Matters—Regulatory Liabilities—ASP Gain. 65 Table of Contents Consumers Electric Utility Results of Operations Presented in the following table are the detailed changes to the electric utility’s net income available to common stockholders for 2025 versus 2024: In Millions Year Ended December 31, 2024 $ 681 Reasons for the change Electric deliveries 1 and rate increases Rate increase, including return on higher renewable capital spending $ 210 Higher revenue due primarily to higher sales volume 29 Lower energy waste reduction program revenues (8) Higher other revenues 20 $ 251 Maintenance and other operating expenses Lower coal-fueled generation costs 2 26 Lower energy waste reduction program costs 8 Higher service restoration costs, net of 2025 deferred storm expense 3 (25) Higher vegetation management costs (25) Higher other supply costs (21) Higher IT expenses, including early-phase ERP implementation costs (19) Higher other distribution costs (13) Higher other maintenance and operating expenses (11) (80) Depreciation and amortization Increased plant in service, reflecting higher capital spending (38) General taxes Higher property taxes, reflecting higher capital spending (16) Other income, net of expenses (2) Interest charges (29) Income taxes Higher electric utility pre-tax earnings (25) Absence of 2024 deferred tax liability reversals (11) State deferred tax remeasurement 4 (8) Higher other income taxes (4) (48) Year Ended December 31, 2025 $ 719 1 Deliveries to end-use customers were 37.4 billion kWh in 2025 and 36.8 billion kWh in 2024. 2 See Item 8.
Once approved, permits issued from an authorized state would serve as the basis for compliance, replacing the requirement to self-certify each aspect of the 2015 CCR rule.
The EPA was granted authority to review these permitting programs to determine if permits issued under the proposed program would be as protective as the federal rule. Once approved, permits issued from an authorized state would serve as the basis for compliance, replacing the requirement to self-certify each aspect of the 2015 CCR rule.
While CMS Energy and Consumers cannot predict the outcome of these matters, which could affect them materially, they intend to continue to move forward with their clean and lean strategy.
While CMS Energy and Consumers cannot predict the outcome of these matters, which could affect them materially, they intend to continue to move forward with a triple-bottom-line approach that focuses on people, planet, and prosperity.
Failure of EGLE to renew any NPDES permit, a successful appeal against a permit, a change in the interpretation or scope of NPDES permitting, or onerous terms contained in a permit could have a significant detrimental effect on the operations of a facility. Protected Wildlife: Multiple regulations apply, or may apply, to Consumers relating to protected species and habitats.
Failure of EGLE to renew any NPDES permit, a successful appeal against a permit, a change in the interpretation or scope of NPDES permitting, or onerous terms contained in a permit could have a significant detrimental effect on the operations of a facility. Other Outlook and Uncertainties Tax Legislation: CMS Energy and Consumers are subject to changing tax laws.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe annual earnings exposure related to variable-rate financing was immaterial for both CMS Energy and Consumers at December 31, 2024 and 2023, assuming an adverse change in market interest rates of ten percent. For additional details on financial instruments see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 6, Financial Instruments. 88 Table of Contents
Biggest changeThe annual earnings exposure related to variable-rate financing was immaterial for both CMS Energy and Consumers at December 31, 2025 and 2024, assuming an adverse change in market interest rates of 10 percent. For additional details on financial instruments see Item 8.
The following risk sensitivities illustrate the potential loss in fair value, cash flows, or future earnings from financial instruments, assuming a hypothetical adverse change in market rates or prices of ten percent. Potential losses could exceed the amounts shown in the sensitivity analyses if changes in market rates or prices were to exceed ten percent.
The following risk sensitivity illustrates the potential loss in fair value, cash flows, or future earnings from financial instruments, assuming a hypothetical adverse change in market rates or prices of 10 percent. Potential losses could exceed the amounts shown in the sensitivity analyses if changes in market rates or prices were to exceed 10 percent.
Presented in the following table is a sensitivity analysis of interest-rate risk on CMS Energy’s and Consumers’ debt instruments (assuming an adverse change in market interest rates of ten percent): In Millions December 31 2024 2023 Fixed-rate financing—potential loss in fair value CMS Energy, including Consumers $ 717 $ 751 Consumers 543 534 The fair value losses in the above table could be realized only if CMS Energy and Consumers transferred all of their fixed-rate financing to other creditors.
Presented in the following table is a sensitivity analysis of interest-rate risk on CMS Energy’s and Consumers’ debt instruments (assuming an adverse change in market interest rates of 10 percent): In Millions December 31 2025 2024 Fixed-rate financing—potential loss in fair value CMS Energy, including Consumers $ 792 $ 717 Consumers 535 543 The fair value losses in the above table could be realized only if CMS Energy and Consumers transferred all of their fixed-rate financing to other creditors.
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Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 7, Financial Instruments. 91 Table of Contents (This page intentionally left blank) 92 Table of Contents

Other CMS 10-K year-over-year comparisons