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Asset Retirement Obligations
 12 Months Ended
Dec. 31, 2024
Asset Retirement Obligations [Line Items]  
Asset Retirement Obligations Asset Retirement Obligations
CMS Energy and Consumers record the fair value of the cost to remove assets at the end of their useful lives, if there is a legal obligation to remove them. If a reasonable estimate of fair value cannot be made in the period in which the ARO is incurred, such as for assets with indeterminate lives, the liability is recognized when a reasonable estimate of fair value can be made. CMS Energy and Consumers have not recorded liabilities associated with the closure of their hydroelectric facilities and certain gas wells that have an indeterminate life or for assets that have immaterial cumulative disposal costs, such as substation batteries.
CMS Energy and Consumers calculate the fair value of ARO liabilities using an expected present-value technique that reflects assumptions about costs and inflation, and uses a credit-adjusted risk-free rate to discount the expected cash flows. CMS Energy’s ARO liabilities are primarily at Consumers.
Presented below are the categories of assets that CMS Energy and Consumers have legal obligations to remove at the end of their useful lives and for which they have an ARO liability recorded:
ARO DescriptionIn-service DateLong-lived Assets
Closure of coal ash disposal areasvariousGenerating plants coal ash areas
Gas distribution cut, purge, and capvariousGas distribution mains and services
Asbestos abatement1973Electric and gas utility plant
Closure of renewable generation assetsvariousWind and solar generation facilities
Gas wells plug and abandonvariousGas transmission and storage
Presented in the following tables are the changes in CMS Energy’s and Consumers’ ARO liabilities:
In Millions
Company and ARO DescriptionARO Liability 12/31/2023IncurredSettledAccretionCash Flow RevisionsARO Liability 12/31/2024
CMS Energy, including Consumers
Consumers$739 $1 $(69)$33 $(10)$694 
Renewable generation assets32 — — 2 — 34 
Total CMS Energy$771 $1 $(69)$35 $(10)$728 
Consumers
Coal ash disposal areas$268 $1 $(51)$12 $— $230 
Gas distribution cut, purge, and cap290 — (9)15 (1)295 
Asbestos abatement51 — (7)2 (9)37 
Renewable generation assets102 — — 3 — 105 
Gas wells plug and abandon28 — (2)1 — 27 
Total Consumers$739 $1 $(69)$33 $(10)$694 
In May 2024, the EPA finalized a rule regulating CCR impoundments at electric generating facilities that became inactive prior to the effective date of a rule published in 2015 regulating CCRs under RCRA. Additionally, the EPA established groundwater monitoring, corrective action, closure, and post-closure care requirements for CCR surface impoundments and landfills closed prior to the effective date of the 2015 CCR rule, but that do not meet the closure technical and performance standards of the May 2024 rule. These include inactive CCR landfills that were previously exempted from regulation but that are now considered CCR management units. In response to the new rule, Consumers recorded an immaterial increase to its existing ARO and is performing a review of legacy impoundments and of other parts of the 2024 rule. If needed, Consumers will record an incremental ARO for legacy impoundments when a reasonable estimate of the fair value of the associated costs can be made; any resulting ARO could be material. Consumers has historically been authorized to recover in electric rates costs related to coal ash disposal sites.
In Millions
Company and ARO DescriptionARO Liability 12/31/2022IncurredSettledAccretionCash Flow RevisionsARO Liability 12/31/2023
CMS Energy, including Consumers
Consumers$722 $4 $(28)$32 $9 $739 
Renewable generation assets24 7 — 1 — 32 
Total CMS Energy$746 $11 $(28)$33 $9 $771 
Consumers
Coal ash disposal areas$272 $— $(15)$11 $— $268 
Gas distribution cut, purge, and cap287 — (10)14 (1)290 
Asbestos abatement39 — (1)3 10 51 
Renewable generation assets95 4 — 3 — 102 
Gas wells plug and abandon29 — (2)1 — 28 
Total Consumers$722 $4 $(28)$32 $9 $739 
Consumers Energy Company  
Asset Retirement Obligations [Line Items]  
Asset Retirement Obligations Asset Retirement Obligations
CMS Energy and Consumers record the fair value of the cost to remove assets at the end of their useful lives, if there is a legal obligation to remove them. If a reasonable estimate of fair value cannot be made in the period in which the ARO is incurred, such as for assets with indeterminate lives, the liability is recognized when a reasonable estimate of fair value can be made. CMS Energy and Consumers have not recorded liabilities associated with the closure of their hydroelectric facilities and certain gas wells that have an indeterminate life or for assets that have immaterial cumulative disposal costs, such as substation batteries.
CMS Energy and Consumers calculate the fair value of ARO liabilities using an expected present-value technique that reflects assumptions about costs and inflation, and uses a credit-adjusted risk-free rate to discount the expected cash flows. CMS Energy’s ARO liabilities are primarily at Consumers.
Presented below are the categories of assets that CMS Energy and Consumers have legal obligations to remove at the end of their useful lives and for which they have an ARO liability recorded:
ARO DescriptionIn-service DateLong-lived Assets
Closure of coal ash disposal areasvariousGenerating plants coal ash areas
Gas distribution cut, purge, and capvariousGas distribution mains and services
Asbestos abatement1973Electric and gas utility plant
Closure of renewable generation assetsvariousWind and solar generation facilities
Gas wells plug and abandonvariousGas transmission and storage
Presented in the following tables are the changes in CMS Energy’s and Consumers’ ARO liabilities:
In Millions
Company and ARO DescriptionARO Liability 12/31/2023IncurredSettledAccretionCash Flow RevisionsARO Liability 12/31/2024
CMS Energy, including Consumers
Consumers$739 $1 $(69)$33 $(10)$694 
Renewable generation assets32 — — 2 — 34 
Total CMS Energy$771 $1 $(69)$35 $(10)$728 
Consumers
Coal ash disposal areas$268 $1 $(51)$12 $— $230 
Gas distribution cut, purge, and cap290 — (9)15 (1)295 
Asbestos abatement51 — (7)2 (9)37 
Renewable generation assets102 — — 3 — 105 
Gas wells plug and abandon28 — (2)1 — 27 
Total Consumers$739 $1 $(69)$33 $(10)$694 
In May 2024, the EPA finalized a rule regulating CCR impoundments at electric generating facilities that became inactive prior to the effective date of a rule published in 2015 regulating CCRs under RCRA. Additionally, the EPA established groundwater monitoring, corrective action, closure, and post-closure care requirements for CCR surface impoundments and landfills closed prior to the effective date of the 2015 CCR rule, but that do not meet the closure technical and performance standards of the May 2024 rule. These include inactive CCR landfills that were previously exempted from regulation but that are now considered CCR management units. In response to the new rule, Consumers recorded an immaterial increase to its existing ARO and is performing a review of legacy impoundments and of other parts of the 2024 rule. If needed, Consumers will record an incremental ARO for legacy impoundments when a reasonable estimate of the fair value of the associated costs can be made; any resulting ARO could be material. Consumers has historically been authorized to recover in electric rates costs related to coal ash disposal sites.
In Millions
Company and ARO DescriptionARO Liability 12/31/2022IncurredSettledAccretionCash Flow RevisionsARO Liability 12/31/2023
CMS Energy, including Consumers
Consumers$722 $4 $(28)$32 $9 $739 
Renewable generation assets24 7 — 1 — 32 
Total CMS Energy$746 $11 $(28)$33 $9 $771 
Consumers
Coal ash disposal areas$272 $— $(15)$11 $— $268 
Gas distribution cut, purge, and cap287 — (10)14 (1)290 
Asbestos abatement39 — (1)3 10 51 
Renewable generation assets95 4 — 3 — 102 
Gas wells plug and abandon29 — (2)1 — 28 
Total Consumers$722 $4 $(28)$32 $9 $739