Exit Activities and Asset Sales

9 Months Ended

Sep. 30, 2025

Restructuring Cost and Reserve [Line Items]

Exit Activities and Asset Sales

Exit Activities and Asset Sales

J.H. Campbell Retirement: Under its Clean Energy Plan, Consumers had planned to retire J.H. Campbell in 2025. In order to ensure necessary staffing at J.H. Campbell through the planned retirement, Consumers implemented a retention incentive program. The terms of and Consumers’ obligations under this program have not been modified as a result of the U.S. Secretary of Energy’s emergency orders requiring the continued operation of J.H. Campbell. Consumers will make final payments due under this retention plan in November 2025. Should the U.S. Department of Energy issue additional emergency orders that require the continued operation of J.H. Campbell beyond November 2025, Consumers is prepared to implement additional retention measures to ensure appropriate staffing levels. For additional information on the emergency orders associated with J.H. Campbell, see Note 1, Regulatory Matters.

The aggregate cost of the J.H. Campbell program is estimated to be $48 million. The MPSC has approved deferred accounting treatment for these costs; these expenses are deferred as a regulatory asset. As of September 30, 2025, the cumulative cost incurred and deferred as a regulatory asset related to the J.H. Campbell retention incentive program was $47 million. Amounts deferred under the program are subsequently collected from customers over three years.

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

In Millions
Nine Months Ended September 30	2025			2024
Retention benefit liability at beginning of period		$	14		$	16
Costs deferred as a regulatory asset1		4			6
Retention benefit liability at the end of the period2		$	18		$	22

1Includes $1 million for the three months ended September 30, 2025 and $3 million for the three months ended September 30, 2024.

2Includes current portion of other liabilities of $18 million at September 30, 2025 and $9 million at September 30, 2024.

Sale of Hydroelectric Facilities: In September 2025, Consumers signed an agreement to sell its 13 river hydroelectric dams, which are located throughout Michigan, to a non-affiliated company. Additionally, Consumers signed an agreement to purchase power generated by the facilities for 30 years, at a price that reflects the counterparty’s acceptance of the risks and rewards of ownership of the facilities, including FERC licensing obligations. The agreements are contingent upon MPSC and FERC approval, which must be filed within 60 days of signing. Timing of the regulatory review process is uncertain and could extend 12 to 18 months or longer. In Consumers’ most recent electric rate case, the MPSC approved deferred accounting treatment for costs of owning and operating the hydroelectric dams pending and until completion of the transaction. At September 30, 2025, the net book value of the hydroelectric facilities was immaterial.

To ensure necessary staffing at the hydroelectric facilities through the anticipated sale, Consumers has provided current employees at the facilities with a retention incentive program. Subsequently, to ensure continued safe operation of the facilities after the sale, the buyer will offer employment to the current hydroelectric employees for a period of at least a year. The retention incentive benefits are contingent upon MPSC and FERC approval of the sale transaction.

Consumers Energy Company

Restructuring Cost and Reserve [Line Items]

Exit Activities and Asset Sales

Exit Activities and Asset Sales

J.H. Campbell Retirement: Under its Clean Energy Plan, Consumers had planned to retire J.H. Campbell in 2025. In order to ensure necessary staffing at J.H. Campbell through the planned retirement, Consumers implemented a retention incentive program. The terms of and Consumers’ obligations under this program have not been modified as a result of the U.S. Secretary of Energy’s emergency orders requiring the continued operation of J.H. Campbell. Consumers will make final payments due under this retention plan in November 2025. Should the U.S. Department of Energy issue additional emergency orders that require the continued operation of J.H. Campbell beyond November 2025, Consumers is prepared to implement additional retention measures to ensure appropriate staffing levels. For additional information on the emergency orders associated with J.H. Campbell, see Note 1, Regulatory Matters.

The aggregate cost of the J.H. Campbell program is estimated to be $48 million. The MPSC has approved deferred accounting treatment for these costs; these expenses are deferred as a regulatory asset. As of September 30, 2025, the cumulative cost incurred and deferred as a regulatory asset related to the J.H. Campbell retention incentive program was $47 million. Amounts deferred under the program are subsequently collected from customers over three years.

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

In Millions
Nine Months Ended September 30	2025			2024
Retention benefit liability at beginning of period		$	14		$	16
Costs deferred as a regulatory asset1		4			6
Retention benefit liability at the end of the period2		$	18		$	22

1Includes $1 million for the three months ended September 30, 2025 and $3 million for the three months ended September 30, 2024.

2Includes current portion of other liabilities of $18 million at September 30, 2025 and $9 million at September 30, 2024.

Sale of Hydroelectric Facilities: In September 2025, Consumers signed an agreement to sell its 13 river hydroelectric dams, which are located throughout Michigan, to a non-affiliated company. Additionally, Consumers signed an agreement to purchase power generated by the facilities for 30 years, at a price that reflects the counterparty’s acceptance of the risks and rewards of ownership of the facilities, including FERC licensing obligations. The agreements are contingent upon MPSC and FERC approval, which must be filed within 60 days of signing. Timing of the regulatory review process is uncertain and could extend 12 to 18 months or longer. In Consumers’ most recent electric rate case, the MPSC approved deferred accounting treatment for costs of owning and operating the hydroelectric dams pending and until completion of the transaction. At September 30, 2025, the net book value of the hydroelectric facilities was immaterial.

To ensure necessary staffing at the hydroelectric facilities through the anticipated sale, Consumers has provided current employees at the facilities with a retention incentive program. Subsequently, to ensure continued safe operation of the facilities after the sale, the buyer will offer employment to the current hydroelectric employees for a period of at least a year. The retention incentive benefits are contingent upon MPSC and FERC approval of the sale transaction.