Consumers enters into a number of transactions with related parties in the normal course of business. These transactions include but are not limited to:

•payments to and from CMS Energy related to parent company overhead costs

Transactions involving power supply purchases from certain affiliates of CMS Enterprises are based on avoided costs under PURPA, state law, and competitive bidding. The payment of parent company overhead costs is based on the use of accepted industry allocation methodologies. These payments are for costs that occur in the normal course of business.

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


In Millions
Description	Related Party	2021			2020			2019
Purchases of capacity and energy	Affiliates of CMS Enterprises		$	77		$	64		$	75

Amounts payable to related parties for purchased power and other services were $22 million at December 31, 2021 and $13 million at December 31, 2020. Accounts receivable from related parties were $7 million at December 31, 2021 and $16 million at December 31, 2020.

CMS Energy has a demand note payable to the DB SERP rabbi trust. The demand note bears interest at an annual rate of 4.10 percent and has a maturity date of 2028.The portion of the demand note attributable to Consumers was recorded as a note receivable – related party on Consumers’ consolidated balance sheets at December 31, 2021 and 2020.

Consumers has a natural gas transportation agreement with a subsidiary of CMS Energy that extends through 2038, related to a pipeline owned by Consumers. For additional details about the agreement, see Note 8, Leases and Palisades Financing.

In June 2021, Consumers entered into an agreement with DIG, CMS Generation Michigan Power, and CMS ERM to purchase the enterprises segment’s three natural gas-fueled generating units, totaling 1,001 MW of nameplate capacity for $515 million, subject to certain adjustments. The parties plan to close the sale, which is dependent upon regulatory approvals, in 2025.