10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2011

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number		Registrant; State of Incorporation; Address; and Telephone Number	IRS Employer Identification No.
1-9513	CMS ENERGY CORPORATION (A Michigan Corporation) One Energy Plaza, Jackson, Michigan 49201 (517) 788-0550		38-2726431
1-5611	CONSUMERS ENERGY COMPANY (A Michigan Corporation) One Energy Plaza, Jackson, Michigan 49201 (517) 788-0550		38-0442310

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
CMS Energy Corporation: Yes þ No o Consumers Energy Company: Yes þ No o

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).
CMS Energy Corporation: Yes þ No o Consumers Energy Company: Yes þ No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

CMS Energy Corporation:

Large accelerated filer þ Accelerated filer o Non-Accelerated filer o Smaller reporting company o

Consumers Energy Company:

Large accelerated filer o Accelerated filer o Non-Accelerated filer þ Smaller reporting company o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
CMS Energy Corporation: Yes o No þ Consumers Energy Company: Yes o No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock at April 14, 2011:
CMS Energy Corporation:
CMS Energy Common Stock, $0.01 par value	252,352,702
Consumers Energy Company:
Consumers Energy Common Stock, $10 par value, privately held by CMS Energy Corporation	84,108,789

CMS Energy Corporation
Consumers Energy Company

Quarterly Reports on Form 10-Q to the Securities and Exchange Commission for the Period Ended
March 31, 2011

TABLE OF CONTENTS

	Page
Glossary	3
Filing Format	8
Forward-Looking Statements and Information	8
PART I — FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (unaudited)
CMS Energy	30
Consumers	38
Notes to Consolidated Financial Statements	45
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3. Quantitative and Qualitative Disclosures about Market Risk	73
Item 4. Controls and Procedures	73
PART II — OTHER INFORMATION
Item 1. Legal Proceedings	74
Item 1A. Risk Factors	74
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	74
Item 3. Defaults Upon Senior Securities	75
Item 4 Removed and Reserved	75
Item 5. Other Information	75
Item 6. Exhibits	76
Signatures	79
EX-10.4
EX-10.5
EX-10.6
EX-12.1
EX-12.2
EX-31.1
EX-31.2
EX-31.3
EX-31.4
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

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GLOSSARY

Certain terms used in the text and financial statements are defined below.

2008 Energy Law	Comprehensive energy reform package enacted in October 2008 with the approval of Michigan Senate Bill 213 and Michigan House Bill 5524
2010 Form 10-K	Each of CMS Energy’s and Consumers’ Annual Report on Form 10-K for the year ended December 31, 2010
ABATE	Association of Businesses Advocating Tariff Equity
Bay Harbor	A residential/commercial real estate area located near Petoskey, Michigan. In 2002, CMS Energy sold its interest in Bay Harbor.
bcf	Billion cubic feet of gas
Big Rock	Big Rock Point nuclear power plant, formerly owned by Consumers
CAIR	The Clean Air Interstate Rule
Cantera Gas Company	Cantera Gas Company LLC, a non-affiliated company
Cantera Natural Gas, Inc.	Cantera Natural Gas, Inc., a non-affiliated company that purchased CMS Field Services
CATR	The Clean Air Transport Rule
CCB	Coal combustion by-product
CEO	Chief Executive Officer
CFO	Chief Financial Officer
CKD	Cement kiln dust
Clean Air Act	Federal Clean Air Act, as amended
Clean Water Act	Federal Water Pollution Control Act
CMS Capital	CMS Capital, L.L.C., a wholly owned subsidiary of CMS Energy
CMS Energy	CMS Energy Corporation, the parent of Consumers and CMS Enterprises
CMS Enterprises	CMS Enterprises Company, a wholly owned subsidiary of CMS Energy

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CMS ERM	CMS Energy Resource Management Company, formerly CMS MST, a wholly owned subsidiary of CMS Enterprises
CMS Field Services	CMS Field Services, Inc., a former wholly owned subsidiary of CMS Gas Transmission
CMS Gas Transmission	CMS Gas Transmission Company, a wholly owned subsidiary of CMS Enterprises
CMS Land	CMS Land Company, a wholly owned subsidiary of CMS Capital
CMS MST	CMS Marketing, Services and Trading Company, a wholly owned subsidiary of CMS Enterprises, whose name was changed to CMS ERM effective January 2004
CMS Oil and Gas	CMS Oil and Gas Company, a former wholly owned subsidiary of CMS Enterprises
CMS Panhandle Holdings, LLC	A former wholly owned subsidiary of CMS Gas Transmission
Consumers	Consumers Energy Company, a wholly owned subsidiary of CMS Energy
Customer Choice Act	Customer Choice and Electricity Reliability Act, a Michigan statute
D.C.	District of Columbia
Detroit Edison	The Detroit Edison Company, a non-affiliated company
Dodd-Frank Act	Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in July 2010
DOE	U.S. Department of Energy
DOJ	U.S. Department of Justice
EBITDA	Earnings Before Interest, Taxes, Depreciation, and Amortization
EnerBank	EnerBank USA, a wholly owned subsidiary of CMS Capital
Entergy	Entergy Corporation, a non-affiliated company
EPA	U.S. Environmental Protection Agency
EPS	Earnings per share
Exchange Act	Securities Exchange Act of 1934, as amended

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Exeter	Exeter Energy Limited Partnership, a limited partnership formerly owned by HYDRA-CO
FDIC	Federal Deposit Insurance Corporation
FERC	The Federal Energy Regulatory Commission
FLI Liquidating Trust	Trust formed in Missouri bankruptcy court to accomplish the liquidation of Farmland Industries, Inc., a non-affiliated entity
FMB	First mortgage bond
FOV	Finding of Violation
GAAP	U.S. Generally Accepted Accounting Principles
GCR	Gas cost recovery
GWh	Gigawatt-hour (a unit of energy equal to one million kWh)
Health Care Acts	Comprehensive health care reform enacted in March 2010, comprising the Patient Protection and Affordable Care Act and the related Health Care and Education Reconciliation Act
HYDRA-CO	HYDRA-CO Enterprises, Inc., a wholly owned subsidiary of CMS Enterprises
IPP	Independent power producer or independent power production
IRS	Internal Revenue Service
ISFSI	Independent spent fuel storage installation
kWh	Kilowatt-hour (a unit of energy equal to one thousand watt-hours)
Ludington	Ludington pumped storage plant, jointly owned by Consumers and Detroit Edison
MACT	Maximum Achievable Control Technology, which is the emission control that is achieved in practice by the best-controlled similar source; for existing sources, MACT is the average emission limitation achieved by the best performing 12 percent of existing sources or the average limitation achieved by the best performing five sources, depending on the number of sources in the category
MD&A	Management’s Discussion and Analysis

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MDEQ	Michigan Department of Environmental Quality, which, effective March 13, 2011, was re-established after the elimination of the Michigan Department of Natural Resources and Environment
MDL	A pending multi-district litigation case in Nevada
MGP	Manufactured gas plant
Midwest Energy Market	An energy market developed by MISO to provide day-ahead and real-time market information and centralized dispatch for market participants
MISO	The Midwest Independent Transmission System Operator, Inc.
MPSC	Michigan Public Service Commission
MW	Megawatt (a unit of power equal to one million watts)
MWh	Megawatt-hour (a unit of energy equal to one million watt-hours)
NAV	Net asset value
NOV	Notice of Violation
NPDES	National Pollutant Discharge Elimination System
NREPA	Part 201 of Michigan Natural Resources and Environmental Protection Act, a statute that covers environmental activities including remediation
NSR	New Source Review, a construction-permitting program under the Clean Air Act
NYMEX	New York Mercantile Exchange
OPEB	Postretirement benefit plans other than pensions
Palisades	Palisades nuclear power plant, sold by Consumers to Entergy in 2007
Panhandle	Panhandle Eastern Pipe Line Company, including its wholly owned subsidiaries Trunkline, Pan Gas Storage Company, Panhandle Storage Company, and Panhandle Holding Company, a former wholly owned subsidiary of CMS Gas Transmission
PCB	Polychlorinated biphenyl
Pension Plan	Trusteed, non-contributory, defined benefit pension plan of CMS Energy, Consumers, and Panhandle

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PPA	Power purchase agreement
PSCR	Power supply cost recovery
PSD	Prevention of Significant Deterioration
REC	Renewable energy credit established under the 2008 Energy Law
RMRR	Routine maintenance, repair, and replacement
ROA	Retail Open Access, which allows electric generation customers to choose alternative electric suppliers pursuant to the Customer Choice Act
SEC	U.S. Securities and Exchange Commission
SERP	Supplemental Executive Retirement Plan
Superfund	Comprehensive Environmental Response, Compensation and Liability Act
Supplemental Environmental Projects	Environmentally beneficial projects that a party agrees to undertake as part of the settlement of an enforcement action, but which the party is not otherwise legally required to perform
Title V	A federal program under the Clean Air Act designed to standardize air quality permits and the permitting process for major sources of emissions across the U.S.
Trunkline	Trunkline Gas Company, LLC, a former wholly owned subsidiary of CMS Panhandle Holdings, LLC
U.S.	United States
XBRL	eXtensible Business Reporting Language

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FILING FORMAT

This combined Form 10-Q is separately filed by CMS Energy and Consumers. Information in this combined Form 10-Q relating to each individual registrant is filed by such registrant on its own behalf. Consumers makes no representation regarding information relating to any other companies affiliated with CMS Energy other than its own subsidiaries. None of CMS Energy, CMS Enterprises, nor any of CMS Energy’s other subsidiaries (other than Consumers) has any obligation in respect of Consumers’ debt securities and holders of such debt securities should not consider the financial resources or results of operations of CMS Energy, CMS Enterprises, nor any of CMS Energy’s other subsidiaries (other than Consumers and its own subsidiaries (in relevant circumstances)) in making a decision with respect to Consumers’ debt securities. Similarly, none of Consumers nor any other subsidiary of CMS Energy has any obligation in respect of debt securities of CMS Energy.

This report should be read in its entirety. No one section of this report deals with all aspects of the subject matter of this report. This report should be read in conjunction with the consolidated financial statements and related notes and with MD&A included in the 2010 Form 10-K.

FORWARD-LOOKING STATEMENTS AND INFORMATION

This Form 10-Q and other written and oral statements that CMS Energy and Consumers make may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. The use of “might,” “may,” “could,” “should,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “projects,” “forecasts,” “predicts,” “assumes,” and other similar words is intended to identify forward-looking statements that involve risk and uncertainty. This discussion of potential risks and uncertainties is designed to highlight important factors that may impact CMS Energy’s and Consumers’ businesses and financial outlook. CMS Energy and Consumers have no obligation to update or revise forward-looking statements regardless of whether new information, future events, or any other factors affect the information contained in the statements. These forward-looking statements are subject to various factors that could cause CMS Energy’s and Consumers’ actual results to differ materially from the results anticipated in these statements. These factors include CMS Energy’s and Consumers’ inability to predict or control the following, all of which are potentially significant:

• the price of CMS Energy common stock, capital and financial market conditions, and the effect of these market conditions on CMS Energy’s and Consumers’ postretirement benefit plans, interest costs, and access to the capital markets, including availability of financing (including Consumers’ accounts receivable sales program and CMS Energy’s and Consumers’ revolving credit facilities) to CMS Energy, Consumers, or any of their affiliates, and the energy industry;

• the impact of the economy, particularly in Michigan, and potential future volatility in the financial and credit markets on CMS Energy’s, Consumers’, or any of their affiliates’:

• revenues;

• capital expenditure programs and related earnings growth;

• ability to collect accounts receivable from customers;

• cost of capital and availability of capital; and

• Pension Plan and postretirement benefit plans assets and required contributions;

• changes in the economic and financial viability of CMS Energy’s and Consumers’ suppliers, customers, and other counterparties and the continued ability of these third parties, including third parties in bankruptcy, to meet their obligations to CMS Energy and Consumers;

• population changes in the geographic areas where CMS Energy and Consumers conduct business;

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• national, regional, and local economic, competitive, and regulatory policies, conditions, and developments;

• changes in applicable laws, rules, regulations, principles, or practices, or in their interpretation, including those related to taxes, the environment, and accounting matters, that could have an impact on CMS Energy’s and Consumers’ businesses or financial results, including the impact of any future regulations or lawsuits regarding:

• carbon dioxide and other greenhouse gas emissions, including potential future legislation to establish a cap and trade system;

• criteria pollutants, such as nitrogen oxide, sulfur dioxide, and particulate, and hazardous air pollutants, including impacts of CAIR, MACT, and CATR;

• CCBs;

• PCBs;

• cooling water intake or discharge from power plants or other industrial equipment;

• limitations on the use or construction of coal-fueled electric power plants;

• nuclear-related regulation;

• renewable portfolio standards and energy efficiency mandates;

• energy-related derivatives and hedges under the Dodd-Frank Act; and

• any other potential legislative changes, including changes to the ten-percent ROA limit;

• potentially adverse regulatory or legal interpretations or decisions, including those related to environmental laws and regulations, and potential environmental remediation costs associated with these interpretations or decisions, including those that may affect Bay Harbor or Consumers’ RMRR classification under NSR regulations;

• potentially adverse or delayed regulatory treatment or permitting decisions concerning significant matters affecting CMS Energy or Consumers that are or could come before the MDEQ and/or EPA, including Bay Harbor;

• potentially adverse regulatory treatment or failure to receive timely regulatory orders concerning a number of significant matters affecting Consumers that are or could come before the MPSC, including:

• sufficient and timely recovery of:

• environmental and safety-related expenditures for coal-fueled plants and other utility properties;

• power supply and natural gas supply costs;

• operating and maintenance expenses;

• additional utility rate-based investments;

• costs associated with the proposed retirement and decommissioning of facilities;

• MISO energy and transmission costs; and

• costs associated with energy efficiency investments and state or federally mandated renewable resource standards;

• actions of regulators with respect to expenditures subject to tracking mechanisms;

• actions of regulators to prevent or curtail shutoffs for non-paying customers;

• actions of regulators with respect to Consumers’ pilot electric and gas decoupling mechanisms;

• regulatory orders preventing or curtailing rights to self-implement rate requests;

• regulatory orders potentially requiring a refund of previously self-implemented rates; and

• implementation of new energy legislation or revisions of existing regulations;

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• potentially adverse regulatory treatment resulting from pressure on regulators to oppose annual rate increases or to lessen rate impacts upon customers, particularly in difficult economic times;

• loss of customer demand for electric generation supply to alternative energy suppliers;

• the ability of Consumers to recover its regulatory assets in full and in a timely manner;

• the effectiveness of Consumers’ electric and gas decoupling mechanisms in moderating the impact of sales variability on net revenues;

• the ability of Consumers to recover nuclear fuel storage costs incurred as a result of the DOE’s failure to accept spent nuclear fuel on schedule or at all, and the outcome of pending litigation with the DOE;

• the impact of enforcement powers and investigation activities at FERC;

• federal regulation of electric sales and transmission of electricity, including periodic re-examination by federal regulators of CMS Energy’s and Consumers’ market-based sales authorizations in wholesale power markets without price restrictions;

• effects of weather conditions, such as unseasonably warm weather during the winter, on sales;

• the market perception of the energy industry or of CMS Energy, Consumers, or any of their affiliates;

• the credit ratings of CMS Energy or Consumers;

• the impact of credit markets, economic conditions, and any new banking regulations on EnerBank;

• potential effects of the Dodd-Frank Act and related regulations on CMS Energy and Consumers, including regulation of financial institutions such as EnerBank, and shareholder activity that is permitted or may be permitted under the Act;

• disruptions in the normal commercial insurance and surety bond markets that may increase costs or reduce traditional insurance coverage, particularly terrorism and sabotage insurance, performance bonds, and tax-exempt debt insurance, and stability of insurance providers, and the ability of Consumers to recover the costs of any such insurance from customers;

• energy markets, including availability of capacity and the timing and extent of changes in commodity prices for oil, coal, natural gas, natural gas liquids, electricity, and certain related products due to lower or higher demand, shortages, transportation problems, or other developments, and their impact on CMS Energy’s and Consumers’ cash flows and working capital;

• the effectiveness of CMS Energy’s and Consumers’ risk management policies, procedures, and strategies, including their strategies to hedge risk related to future prices of electricity, natural gas, and other energy-related commodities;

• changes in construction material prices and the availability of qualified construction personnel to implement Consumers’ construction program;

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• factors affecting development of generation projects and distribution infrastructure replacement and expansion projects, including those related to project site identification, construction, permitting, and government approvals;

• costs and availability of personnel, equipment, and materials for operating and maintaining existing facilities;

• factors affecting operations, such as unusual weather conditions, catastrophic weather-related damage, unscheduled generation outages, maintenance or repairs, environmental incidents, or electric transmission and distribution or gas pipeline system constraints;

• potential disruption or interruption of facilities or operations due to accidents, war, or terrorism, and the ability to obtain or maintain insurance coverage for these events;

• the impact of an accident, explosion, or other physical disaster involving Consumers’ gas pipelines, gas storage fields, overhead or underground electrical lines, or other utility infrastructure;

• CMS Energy’s and Consumers’ ability to achieve generation planning goals and the occurrence and duration of scheduled or unscheduled generation or gas compression outages;

• technological developments in energy production, delivery, usage, and storage;

• achievement of capital expenditure and operating expense goals, including the 2011 capital expenditures forecast;

• the impact of CMS Energy’s and Consumers’ integrated business software system on their operations, including utility customer billing and collections;

• potential effects of the Health Care Acts on existing or future health care costs;

• adverse outcomes regarding tax positions;

• adverse consequences resulting from any past or future assertion of indemnity or warranty claims associated with assets and businesses previously owned by CMS Energy or Consumers, including claims resulting from attempts by foreign or domestic governments to assess taxes on past operations or transactions;

• the outcome, cost, and other effects of legal or administrative proceedings, settlements, investigations, or claims;

• earnings volatility resulting from the application of fair value accounting to certain energy commodity contracts, such as electricity sales agreements and interest rate and foreign currency contracts;

• changes in financial or regulatory accounting principles or policies;

• a possible future requirement to comply with International Financial Reporting Standards, which differ from GAAP in various ways, including the present lack of special accounting treatment for regulated activities; and

• other business or investment matters that may be disclosed from time to time in CMS Energy’s and Consumers’ SEC filings, or in other publicly issued documents.

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For additional details regarding these and other uncertainties, see the “Outlook” section included in MD&A; Note 2, Contingencies and Commitments; Note 3, Regulatory Matters; and Part II, Item 1A. Risk Factors.

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CMS Energy Corporation
Consumers Energy Company

MANAGEMENT’S DISCUSSION AND ANALYSIS

This MD&A is a combined report of CMS Energy and Consumers.

EXECUTIVE OVERVIEW

CMS Energy is an energy company operating primarily in Michigan. It is the parent holding company of several subsidiaries, including Consumers, an electric and gas utility, and CMS Enterprises, primarily a domestic IPP. Consumers’ electric utility operations include the generation, purchase, distribution, and sale of electricity, and Consumers’ gas utility operations include the purchase, transmission, storage, distribution, and sale of natural gas. Consumers’ customer base consists of a mix of residential, commercial, and diversified industrial customers. CMS Enterprises, through its subsidiaries and equity investments, owns and operates power generation facilities.

CMS Energy and Consumers manage their businesses by the nature of services each provides. CMS Energy operates principally in three business segments: electric utility; gas utility; and enterprises, its non-utility investments and operations. Consumers operates principally in two business segments: electric utility and gas utility.

CMS Energy and Consumers earn revenue and generate cash from operations by providing electric and natural gas utility services; electric distribution and generation; gas transmission, storage, and distribution; and other energy-related services. Their businesses are affected primarily by:

• regulation and regulatory matters;

• economic conditions;

• weather;

• energy commodity prices;

• interest rates; and

• CMS Energy’s and Consumers’ securities’ credit ratings.

During the past several years, CMS Energy’s “Growing Forward” business strategy has emphasized the following key elements:

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Utility Investment

Consumers expects to make capital investments of more than $6 billion over the next five years, with a key aspect of its strategy being the balanced energy initiative. The balanced energy initiative is a comprehensive energy resource plan to meet Consumers’ projected short-term and long-term electric power requirements with energy efficiency, demand management, expanded use of renewable energy, development of new power plants, pursuit of additional PPAs to complement existing generating sources, potential retirement or mothballing of older generating units, and continued operation of others.

Renewable energy projects are a major component of Consumers’ planned capital investments. Consumers expects to spend $600 million on renewable energy investments through 2015. The 2008 Energy Law requires that at least ten percent of Consumers’ electric sales volume come from renewable energy sources by 2015, and it includes requirements for specific capacity additions. Consumers has historically included renewable resources as part of its portfolio, with about five percent of its present power supply coming from such renewable sources as hydroelectric, landfill gas, biomass, and wind. In February 2011, Consumers filed with the MPSC an amended renewable energy plan, reducing the surcharge billed to customers by an annual amount of $55 million. Consumers proposed the amendment as a result of lower-than-anticipated costs to comply with the renewable energy requirements prescribed by the 2008 Energy Law.

In February 2011, Consumers and Detroit Edison together announced an $800 million maintenance and upgrade project at their jointly owned Ludington pumped-storage plant. The project, scheduled to begin in 2013 and extend through 2019, will increase the capacity of Ludington from its present level of 1,872 MW to about 2,172 MW. Consumers expects its share of the project cost to total $400 million.

Consumers’ smart grid program will also represent a significant capital investment. The initial substantial deployment, planned for 2012, will include advanced metering infrastructure and follow a phased approach. Consumers expects to spend $355 million on its smart grid program through 2015.

Regulation

Regulatory matters are a key aspect of CMS Energy’s and Consumers’ businesses, particularly Consumers’ rate cases and regulatory proceedings before the MPSC. Recent significant regulatory events and developments are summarized below.

•	2010 Gas Rate Case: In August 2010, Consumers filed an application with the MPSC seeking an annual gas rate increase of $55 million based on an 11 percent authorized return on equity.
	In January 2011, Consumers filed support for a self-implemented annual gas rate increase of $48 million. In February 2011, Consumers revised the proposed self-implemented increase to $29 million. The MPSC issued an order in February 2011, delaying Consumers’ self-implementation in order to give other parties to the proceeding an opportunity to respond to Consumers’ revised self-implementation filing. In anticipation of a final order, all parties may file briefs supporting their positions. In April 2011, Consumers filed an initial brief supporting an annual gas rate increase of $45 million, and the MPSC Staff submitted a revised recommended annual revenue increase of $16 million. The parties have engaged in discussions in an effort to settle the issues in this case. As of April 28, 2011, a settlement was not yet finalized, but Consumers believes settlement is likely.
•	Electric Revenue Decoupling Mechanism: In March 2011, Consumers filed its first reconciliation of the electric revenue decoupling mechanism, requesting recovery of $27 million from customers for the period December 2009 through November 2010. The decoupling mechanism was authorized in Consumers’ 2009 electric rate case order, subject to certain conditions, and extended in the 2010 electric rate case order. It allows Consumers to adjust future electric rates to compensate for changes in sales volumes resulting from weather fluctuations, energy efficiency,

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and conservation. Various parties have filed appeals concerning the electric decoupling mechanism.

Environmental regulation is another area of importance for CMS Energy and Consumers, and they are monitoring numerous legislative and regulatory initiatives to regulate greenhouse gases, as well as related litigation. The EPA has taken steps to regulate greenhouse gases under the Clean Air Act and is on a path to issue final new source performance standards in May 2012 addressing greenhouse gas emissions from fossil-fueled electric generating units. The EPA is also expected to propose guidelines for states to regulate greenhouse gas emissions from existing sources.

During 2010, the EPA issued various proposals for regulating PCBs, CCBs, sulfur dioxide, and nitrogen oxides. Additionally, in March 2011, the EPA proposed a hazardous air pollutant rule that would establish MACT emission standards for mercury and other hazardous air pollutants. Under the proposed rule, some coal-fueled electric generating units would require additional controls for hazardous air pollutants. Also in March 2011, the EPA issued a proposed rule to regulate existing electric generating plant cooling water intake systems. CMS Energy and Consumers are monitoring these developments for potential effects on their operations.

Safety

The safety and security of employees, customers, and the general public remain a priority of CMS Energy and Consumers. 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.

Financial Performance in 2011 and Beyond

For the three months ended March 31, 2011, CMS Energy’s net income available to common stockholders was $135 million, and diluted earnings per share were $0.52. This compares with net income available to common stockholders of $85 million and diluted earnings per share of $0.34 for the three months ended March 31, 2010. Among the most significant factors contributing to CMS Energy’s improved performance were benefits from electric and gas rate orders and increased gas deliveries, offset partially by higher distribution and service restoration costs.

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.

CMS Energy believes that economic conditions in Michigan have stabilized. Although Michigan’s economy continues to be affected by the recession and its impact on the state’s automotive industry, by high unemployment rates, and by a modestly shrinking population, there are indications that the recession has eased in Michigan. Consumers expects its electric sales to increase by about 1.5 percent annually through 2016, driven largely by the continued rise in industrial production. Consumers is projecting that its gas sales will decline by about one percent annually through 2016, due largely to energy efficiency and conservation.

As Consumers continues to seek fair and timely regulatory treatment, delivering customer value will remain a key strategic priority. To keep costs down for its utility customers, Consumers has set aggressive goals for annual productivity improvements. Additionally, Consumers will strive to give priority to capital investments that increase customer value or lower costs.

Consumers expects to continue to have sufficient capacity to fund its investment-based growth plans. CMS Energy also expects its sources of liquidity to remain sufficient to meet its cash requirements. CMS Energy and Consumers will continue to monitor developments in the financial and credit markets,

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as well as government policy responses to those developments, for potential implications for their businesses and their future financial needs.

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RESULTS OF OPERATIONS

CMS Energy’s Consolidated Results of Operations

In Millions (except for per share amounts)
Three Months Ended March 31	2011		2010		Change
Net Income Available to Common Stockholders	$	135	$	85	$	50
Basic Earnings Per Share	$	0.54	$	0.37	$	0.17
Diluted Earnings Per Share	$	0.52	$	0.34	$	0.18

In Millions
Three Months Ended March 31	2011			2010			Change
Electric Utility	$	65		$	41		$	24
Gas Utility		88			66			22
Enterprises		3			9			(6	)
Corporate Interest and Other		(23	)		(30	)		7
Discontinued Operations		2			(1	)		3
Net Income Available to Common Stockholders	$	135		$	85		$	50

Presented in the following table are specific after-tax changes to net income available to common stockholders for the three months ended March 31, 2011 versus 2010:

In Millions
Three Months Ended March 31	2011 better/(worse) than 2010
Electric and gas rate orders				$	25
Gas sales:
Weather		$	15
Deliveries and decoupling benefit			9		24
Electric sales and decoupling					8
Distribution and service restoration costs					(10	)
Other, mainly depreciation and property tax					(7	)	$	40
Voluntary separation plan cost in 2010 and other								10
Total change							$	50

Consumers’ Electric Utility Results of Operations

In Millions
Three Months Ended March 31	2011		2010		Change
Net Income Available to Common Stockholders	$	65	$	41	$	24
Reasons for the change:
Electric deliveries and rate increases					$	28
Power supply costs and related revenue						11
Maintenance and other operating expenses						(14	)
Depreciation and amortization						13
Interest charges						1
Income taxes						(13	)
Other						(2	)
Total change					$	24

Electric deliveries and rate increases: For the three months ended March 31, 2011, electric delivery revenues increased $28 million compared with 2010. This variance consisted of $26 million from a

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November 2010 rate increase and $2 million of other miscellaneous revenue increases. Overall, deliveries to end-use customers were 9.3 billion kWh in 2011, an increase of 0.2 billion kWh, or 2.2 percent, compared with 2010.

Power supply costs and related revenue: For the three months ended March 31, 2011, PSCR revenue increased $11 million compared with 2010. This increase was due to the absence, in 2011, of a disallowance in 2010 of certain power supply costs in Consumers’ 2007 PSCR reconciliation case.

Maintenance and other operating expenses: For the three months ended March 31, 2011, maintenance and other operating expenses increased $14 million compared with 2010. This increase was due to $13 million of higher service restoration costs, caused by a series of unusually severe winter storms, and $7 million of higher plant maintenance and other operating expenses. These increases were offset partially by a $6 million decrease resulting from the absence, in 2011, of voluntary separation plan expenses incurred in 2010.

Depreciation and amortization: For the three months ended March 31, 2011, depreciation and amortization expense decreased $13 million compared with 2010, due primarily to lower amortization expense on certain regulatory assets.

Income taxes: For the three months ended March 31, 2011, income taxes increased $13 million compared with 2010, due to higher electric utility earnings in 2011.

Consumers’ Gas Utility Results of Operations

In Millions
Three Months Ended March 31	2011		2010		Change
Net Income Available to Common Stockholders	$	88	$	66	$	22
Reasons for the change:
Gas deliveries and rate increases					$	32
Maintenance and other operating expenses						12
Depreciation and amortization						(3	)
General taxes						(1	)
Income taxes						(16	)
Other						(2	)
Total change					$	22

Gas deliveries and rate increases: For the three months ended March 31, 2011, gas delivery revenues increased $32 million compared with 2010. This increase consisted of $26 million of additional revenues from colder weather in 2011 and $6 million from higher customer usage. Gas deliveries, including miscellaneous transportation to end-use customers, were 133.9 bcf in 2011, an increase of 14.8 bcf, or 12.4 percent, compared with 2010.

Maintenance and other operating expenses: For the three months ended March 31, 2011, maintenance and other operating expenses decreased $12 million compared with 2010. This decrease reflected $4 million of voluntary separation plan expenses incurred in 2010, lower uncollectible accounts expense of $3 million, and a $5 million decrease in other operating expenses.

Income taxes: For the three months ended March 31, 2011, income taxes increased $16 million compared with 2010, due to higher gas utility earnings in 2011.

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Enterprises Results of Operations

In Millions
Three Months Ended March 31	2011		2010		Change
Net Income Available to Common Stockholders	$	3	$	9	$	(6	)

For the three months ended March 31, 2011, net income of the enterprises segment decreased $6 million compared with 2010, reflecting lower electric capacity revenue of $3 million and lower net mark-to-market gains of $3 million.

Corporate Interest and Other Results of Operations

In Millions
Three Months Ended March 31	2011			2010			Change
Net Loss Available to Common Stockholders	$	(23	)	$	(30	)	$	7

For the three months ended March 31, 2011, corporate interest and other net expenses decreased $7 million compared with 2010, due primarily to lower income tax expense in 2011.

Discontinued Operations

For the three months ended March 31, 2011, income of $2 million was recorded from discontinued operations due to a legal settlement, compared with a loss of $1 million in 2010, reflecting operating results of Exeter.

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CASH POSITION, INVESTING, AND FINANCING

At March 31, 2011, CMS Energy had $831 million of consolidated cash and cash equivalents, which included $30 million of restricted cash and cash equivalents. At March 31, 2011, Consumers had $742 million of consolidated cash and cash equivalents, which included $29 million of restricted cash and cash equivalents.

Operating Activities

Presented in the following table are specific components of net cash provided by operating activities for the three months ended March 31, 2011 and 2010:

In Millions
Three Months Ended March 31	2011			2010			Change
CMS Energy, including Consumers
• Net income	$	135		$	88		$	47
• Non-cash transactions1		296			284			12
	$	431		$	372		$	59
• Sale of gas purchased in the prior year		477			449			28
• Accounts receivable sales, net		—			(50	)		50
• Change in other core working capital2		(15	)		53			(68	)
• Postretirement benefits contributions		(19	)		(135	)		116
• Other changes in assets and liabilities, net		(33	)		(32	)		(1	)
Net cash provided by operating activities	$	841		$	657		$	184
Consumers
• Net income	$	153		$	107		$	46
• Non-cash transactions1		256			219			37
	$	409		$	326		$	83
• Sale of gas purchased in the prior year		477			449			28
• Accounts receivable sales, net		—			(50	)		50
• Change in other core working capital2		(10	)		42			(52	)
• Postretirement benefits contributions		(19	)		(125	)		106
• Other changes in assets and liabilities, net		10			41			(31	)
Net cash provided by operating activities	$	867		$	683		$	184

1	Non-cash transactions comprise depreciation and amortization, changes in deferred income taxes, postretirement benefits expense, and other non-cash items.
2	Other core working capital comprises other changes in accounts receivable and accrued revenues, inventories, and accounts payable.

For the three months ended March 31, 2011, net cash provided by operating activities at CMS Energy and at Consumers increased $184 million compared with 2010. The increase was due primarily to higher net income, the absence of Pension Plan contributions in 2011, and increased collection of accounts receivable.

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Investing Activities

Presented in the following table are specific components of cash used in investing activities for the three months ended March 31, 2011 and 2010:

In Millions
Three Months Ended March 31	2011			2010			Change
CMS Energy, including Consumers
• Capital expenditures	$	(191	)	$	(190	)	$	(1	)
• Cash effect of deconsolidation of partnerships		—			(10	)		10
• Costs to retire property and other		(37	)		(12	)		(25	)
Net cash used in investing activities	$	(228	)	$	(212	)	$	(16	)
Consumers
• Capital expenditures	$	(186	)	$	(190	)	$	4
• Costs to retire property and other		(42	)		(12	)		(30	)
Net cash used in investing activities	$	(228	)	$	(202	)	$	(26	)

For the three months ended March 31, 2011, net cash used in investing activities increased $16 million at CMS Energy and $26 million at Consumers compared with 2010. These changes were due primarily to CMS Energy’s contribution of $27 million to its SERP fund, which included a contribution of $20 million by Consumers.

Financing Activities

Presented in the following table are specific components of net cash (used in) provided by financing activities for the three months ended March 31, 2011 and 2010:

In Millions
Three Months Ended March 31	2011			2010			Change
CMS Energy, including Consumers
• Issuance of FMBs, convertible senior notes, senior notes, and other debt	$	13		$	325		$	(312	)
• Retirement of long-term debt		(13	)		(34	)		21
• Payment of common stock dividends		(53	)		(34	)		(19	)
• Other financing activities		(8	)		(36	)		28
Net cash (used in) provided by financing activities	$	(61	)	$	221		$	(282	)
Consumers
• Retirement of debt and other debt maturity payments	$	(9	)	$	(9	)	$	—
• Payments of common stock dividends		(104	)		(114	)		10
• Stockholder’s contribution from CMS Energy		125			200			(75	)
• Other financing activities		(9	)		(6	)		(3	)
Net cash provided by financing activities	$	3		$	71		$	(68	)

For the three months ended March 31, 2011, net cash used in financing activities at CMS Energy increased $282 million compared to 2010. The change was due primarily to a decrease in net proceeds from borrowings by CMS Energy.

For the three months ended March 31, 2011, net cash provided by financing activities at Consumers decreased $68 million compared with 2010. The change was due primarily to a decrease in stockholder’s contribution from CMS Energy, offset partially by a decrease in common stock dividend payments to CMS Energy.

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CAPITAL RESOURCES AND LIQUIDITY

CMS Energy uses dividends from its subsidiaries and external financing and capital transactions to invest in its utility and non-utility businesses, retire debt, pay dividends, and fund its other obligations. The ability of CMS Energy’s subsidiaries, including Consumers, to pay dividends to CMS Energy depends upon each subsidiary’s revenues, earnings, cash needs, and other factors. In addition, Consumers’ ability to pay dividends is restricted by certain terms included in its articles of incorporation, as well as by FERC requirements. For the three months ended March 31, 2011, Consumers paid $104 million in common stock dividends to CMS Energy.

Consumers uses cash flows generated from operations and external financing transactions, as well as stockholder’s contributions from CMS Energy, to fund capital expenditures, retire debt, pay dividends, contribute to its employee benefit plans, and fund its other obligations.

CMS Energy’s and Consumers’ access to the financial and capital markets depends on their credit ratings and on market conditions. As evidenced by past financing transactions, CMS Energy and Consumers have had ready access to these markets and, barring major market dislocations or disruptions, they expect to continue to have such access. If access to these markets were to become diminished or otherwise restricted, however, CMS Energy and Consumers would implement contingency plans to address debt maturities, which could include reduced capital spending. CMS Energy and Consumers also had the following secured revolving credit facilities available at March 31, 2011:

In Millions
	Amount of		Letters of Credit		Amount
	Facility		Outstanding		Available		Expiration Date
CMS Energy
Revolving credit facility1	$	550	$	3	$	547	March 2016
Consumers
Revolving credit facility2,3		500		300		200	March 2016
Revolving credit facility3		150		—		150	August 2013

1	On March 31, 2011, CMS Energy entered into a $550 million secured revolving credit facility with a consortium of banks. This facility has a five-year term and replaces CMS Energy’s revolving credit facility that was set to expire in 2012. Obligations under this facility are secured by Consumers common stock.
2	On March 31, 2011, Consumers entered into a $500 million secured revolving credit facility with a consortium of banks. This facility has a five-year term and replaces Consumers’ revolving credit facility that was set to expire in 2012.
3	Obligations under this facility are secured by FMBs of Consumers.

CMS Energy and Consumers use these credit facilities for general working capital purposes and to issue letters of credit. An additional source of liquidity is Consumers’ revolving accounts receivable sales program, which allows it to transfer up to $250 million of accounts receivable as a secured borrowing. At March 31, 2011, $250 million of accounts receivable were eligible for transfer under this program.

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CMS Energy’s new $550 million revolving credit agreement specifies a maximum debt-to-EBITDA ratio, as defined therein. Consumers’ new $500 million revolving credit agreement specifies a maximum debt-to-capital ratio, as defined therein. CMS Energy and Consumers were each in compliance with these limits as of March 31, 2011, as presented in the following table:

			Ratio at
Revolving Credit Agreement	Description	Maximum Limit	March 31, 2011
CMS Energy’s $550 million revolving credit agreement	Debt to EBITDA	6.0 to 1.0	4.54 to 1.0
Consumers’ $500 million revolving credit agreement	Debt to Capital	0.65 to 1.0	0.50 to 1.0

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. CMS Energy and Consumers believe that their present level of cash and their expected cash flows from operating activities, together with their access to sources of liquidity, will be sufficient to fund their contractual obligations for 2011 and beyond.

Off-Balance-Sheet Arrangements

CMS Energy, Consumers, and certain of their subsidiaries also enter into various arrangements in the normal course of business to facilitate commercial transactions with third parties. These arrangements include indemnities, surety bonds, letters of credit, and financial and performance guarantees. Indemnities are usually agreements to reimburse a counterparty that may incur losses due to outside claims or breach of contract terms. The maximum payment that could be required under a number of these indemnity obligations is not estimable. While CMS Energy and Consumers believe it is unlikely that they will incur any material losses related to indemnities they have not recorded as liabilities, they cannot predict the impact of these contingent obligations on their liquidity and financial condition. For additional details on these and other guarantee arrangements, see Note 2, Contingencies and Commitments, “Guarantees.”

OUTLOOK

Several business trends and uncertainties may affect CMS Energy’s and Consumers’ financial condition and results of operations. These trends and uncertainties could have a material impact on CMS Energy’s and Consumers’ consolidated income, cash flows, or financial position. For additional details regarding these and other uncertainties, see “Forward-Looking Statements and Information;” Note 2, Contingencies and Commitments; and Part II, Item 1A. Risk Factors.

Consumers’ Electric Utility Business Outlook and Uncertainties

Balanced Energy Initiative: Consumers’ balanced energy initiative is a comprehensive energy resource plan designed to meet the short-term and long-term energy needs of its customers through:

• energy efficiency;

• demand management;

• expanded use of renewable energy;

• development of new power plants;

• pursuit of additional PPAs to complement existing generating sources;

• continued operation of existing units; and

• potential retirement or mothballing of older generating units.

In May 2010, Consumers announced plans to defer the development of its proposed 830 MW coal-fueled plant at its Karn/Weadock generating complex. This decision reflects reduced customer demand for

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electricity due to the recession, forecasted lower natural gas prices due to recent developments in shale gas recovery technology, and projected surplus generating capacity in the MISO market. Consumers has been monitoring customer demand, fuel and power prices, and other market conditions, and has not set a timetable for a future decision about the project; however, the likelihood that the plant will be constructed has diminished significantly. Consumers’ alternatives to constructing the proposed coal-fueled plant include constructing new gas-fueled generation, relying on additional market purchases, and continued operation of several existing generating units.

Renewable Energy Plan: Consumers’ renewable energy plan details how Consumers will meet REC and capacity standards prescribed by the 2008 Energy Law. This law requires Consumers to obtain RECs in an amount equal to at least ten percent of its electric sales volume (estimated to be 3.5 million RECs annually) by 2015. RECs represent proof that the associated electricity was generated from a renewable energy resource. The law also requires Consumers to obtain 500 MW of capacity from renewable energy resources by 2015, either through generation resources owned by Consumers or through agreements to purchase capacity from other parties. Under its renewable energy plan, Consumers expects to secure its renewable energy requirement each year with a combination of newly generated RECs and previously generated RECs carried over from prior years. At March 31, 2011, the combination of these sources represented 77 percent of Consumers’ 2015 REC requirement.

To meet its renewable capacity requirements, Consumers expects to add more than 500 MW of owned or contracted renewable capacity by 2015. Through March 2011, Consumers has contracted for the purchase of 296 MW of nameplate capacity from renewable energy suppliers, which represents 59 percent of the 2015 renewable capacity requirement.

Consumers has secured more than 80,000 acres of land easements in Michigan’s Huron, Mason, and Tuscola Counties for the potential development of wind generation, and is now collecting wind speed and other meteorological data at those sites. Consumers has entered into construction and supply contracts as well as a contract to purchase wind turbine generators for the construction of a 100-MW wind park in Mason County, the Lake Winds Energy Park, which Consumers expects to be operational in late 2012. Various parties are opposing a special use permit or have proposed restrictive zoning conditions before the local planning commission in an effort to stop the Lake Winds project. Consumers will continue to seek opportunities for wind generation development in support of the renewable capacity standards.

Electric Customer Deliveries and Revenue: Consumers’ electric customer deliveries are largely dependent on Michigan’s economy, which has suffered from economic and financial instability in the automotive and real estate sectors. Consumers believes economic conditions have stabilized, and expects weather-adjusted electric deliveries to increase in 2011 by 2.5 percent compared with 2010. Consumers’ outlook for 2011 includes continuing growth in deliveries to its largest customer, which produces energy-related and electronic device components. Excluding this customer’s growth, Consumers expects weather-adjusted electric deliveries in 2011 to increase by 1.5 percent compared with 2010.

Consumers expects average electric delivery growth of about 1.5 percent annually over the next five years. This increase reflects growth in electric demand, offset partially by the predicted effects of energy efficiency programs and appliance efficiency standards. Actual deliveries will depend on:

• energy conservation measures and results of energy efficiency programs;

• fluctuations in weather; and

• changes in economic conditions, including utilization and expansion or contraction of manufacturing facilities, population trends, and housing activity.

A decoupling mechanism was authorized by the MPSC in Consumers’ 2009 electric rate case order, subject to certain conditions, and extended in the 2010 electric rate case order. It allows Consumers to adjust future electric rates to compensate for changes in sales volumes resulting from weather

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fluctuations, energy efficiency, and conservation. This mechanism reduces the volatility of Consumers’ electric utility revenue.

Electric ROA: The Customer Choice Act allows all of Consumers’ electric customers to buy electric generation service from Consumers or from an alternative electric supplier. The 2008 Energy Law revised the Customer Choice Act by limiting alternative electric supply to ten percent of Consumers’ weather-adjusted retail sales of the preceding calendar year. At March 31, 2011, electric deliveries under the ROA program were at the ten percent limit and alternative electric suppliers were providing 801 MW of generation service to ROA customers. Based on 2010 weather-adjusted retail sales, Consumers expects 2011 electric deliveries under the ROA program to be at a similar level to 2010.

Electric Transmission: In June 2010, FERC issued a Notice of Proposed Rulemaking to establish a closer link between regional electric transmission planning and cost allocations to ensure the construction of required transmission facilities. In a related matter, in July 2010, MISO filed a tariff revision with FERC proposing a cost allocation methodology for a new category of transmission projects. In December 2010, FERC approved MISO’s cost allocation proposal. Under this tariff revision, the cost of these new transmission projects will be spread proportionally across the Midwest Energy Market. Consumers believes that Michigan customers will bear additional costs under MISO’s tariff without receiving comparable benefits from these projects. In January 2011, Consumers, along with the Michigan Attorney General, ABATE, Detroit Edison, the Michigan Municipal Electric Association, and the Michigan Public Power Agency, filed a protest and request for rehearing with FERC, opposing the allocation methodology in the MISO tariff revision. Consumers expects to continue to recover transmission expenses, including those associated with the MISO tariff revision, through the PSCR process.

Electric Rate Matters: Rate matters are critical to Consumers’ electric utility business. For details on Consumers’ electric rate case, PSCR, electric revenue decoupling, uncollectible expense tracking mechanism, electric operation and maintenance expenditures show-cause order, Big Rock decommissioning, renewable energy plan, energy optimization plan, and electric depreciation, see Note 3, Regulatory Matters, “Consumers’ Electric Utility.”

Electric Environmental Estimates: Consumers’ operations are subject to various state and federal environmental laws and regulations. Consumers continues to focus on complying with the Clean Air Act, Clean Water Act, and numerous state and federal environmental regulations, and estimates that it will incur expenditures of $1.9 billion from 2011 through 2018 to comply with these regulations. Consumers expects to recover these costs in customer rates, but cannot guarantee this result. Consumers’ primary environmental compliance focus includes, but is not limited to, the following matters:

Clean Air Interstate Rule/Clean Air Transport Rule/Federal Hazardous Air Pollutant Regulation: Due to a December 2008 court decision that remanded CAIR back to the EPA, CAIR remains in effect, pending the EPA’s finalization of a new rule. In July 2010, the EPA released CATR, a proposed rule that would replace CAIR.

In March 2011, the EPA proposed MACT emission standards for electric generating units, based on Section 112 of the Clean Air Act. Under the proposed rule, some coal-fueled electric generating units would require additional controls for hazardous air pollutants. Existing sources must meet the standards generally within three years of issuance of the final rule. The final rule is expected to be issued in November 2011.

Presently, Consumers’ strategy to comply with CATR and the MACT standards involves the installation of state-of-the-art emission control equipment; however, Consumers continues to evaluate these proposed rules in conjunction with other EPA rulemakings. If adopted in their present form, these rules could result in additional or accelerated environmental compliance costs related to Consumers’ fossil-fueled power plants and the retirement or mothballing of some or all of Consumers’ older, smaller generating units.

Greenhouse Gases: There are numerous legislative and regulatory initiatives at the state, regional, and national levels that involve the regulation of greenhouse gases. Consumers monitors and comments on these initiatives and also follows litigation involving greenhouse gases. Consumers believes Congress

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may eventually pass greenhouse gas legislation, but is unable to predict the form and timing of any final legislation.

In 2009, the U.S. Court of Appeals for the Second Circuit issued a decision that allowed states and private plaintiffs to bring lawsuits in the federal courts against utilities and others based on common law nuisance theories that challenged the defendants’ greenhouse gas emissions. This decision potentially allowed federal judges to impose caps on such emissions on a case-by-case basis without reference to any legislatively created standards. A group of utilities filed a petition with the U.S. Supreme Court, seeking review of the U.S. Court of Appeals decision. In December 2010, the U.S. Supreme Court granted the petition and will decide the case on its merits. Consumers will continue to monitor this litigation.

In 2010, the EPA released its Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule. The final rule, which numerous parties have challenged in the U.S. Court of Appeals for the D.C. Circuit, sets limits for greenhouse gas emissions that define when permits are required for new and existing industrial facilities under NSR PSD and Title V Operating Permit programs. The EPA issued revised guidance on this rule in March 2011. Consumers does not expect that the rule will require it to incur significant expenditures for efficiency upgrades for modified or new facilities.

In December 2010, the EPA entered into a settlement agreement with certain states and environmental groups that puts it on a path to issue proposed new source performance standards in July 2011. This proposal will address greenhouse gas emissions for new fossil-fueled electric generating units and major modifications under Section 111(b) of the Clean Air Act. The EPA will promulgate final standards by May 2012. On the same schedule, the EPA is expected to propose emissions guidelines for the states to regulate greenhouse gas emissions from existing sources under Section 111(d) of the Clean Air Act. Under the expected schedule, states will need to submit plans to the EPA within nine months of issuance of the final rule and guidelines. Consumers will continue to monitor this settlement and any proposed new source performance standards regulations.

In March 2011, the EPA issued a final rule that extends to September 30, 2011 the deadline for reporting 2010 greenhouse gas emissions data under the Greenhouse Gas Reporting Program. The original deadline was March 31, 2011. Consumers is prepared to comply with the final rule.

Litigation, as well as federal laws, EPA regulations regarding greenhouse gases, or similar treaties, state laws, or rules, if enacted, could require Consumers to replace equipment, install additional equipment for emission controls, purchase emission allowances, curtail operations, arrange for alternative sources of supply, or take other steps to manage 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 and capital expenditures in rates consistent with the recovery of other reasonable costs of complying with environmental laws and regulations.

Coal Combustion By-Products: In June 2010, the EPA proposed rules regulating CCBs, such as coal ash, under the Resource Conservation and Recovery Act. Michigan already regulates CCBs as low-hazard industrial waste. The EPA proposed a range of alternatives for regulating CCBs, including regulation as either a non-hazardous waste or a hazardous waste. If coal ash were regulated as a hazardous waste, Consumers would likely cease the beneficial re-use of this product, resulting in significantly more coal ash requiring costly disposal. Additionally, it is possible that existing coal ash disposal areas could be closed and costly alternative arrangements for coal ash disposal could be required if the upgrades to hazardous waste landfill standards are economically prohibitive. Consumers is unable to predict accurately the full impacts from this wide range of possible outcomes, but significant expenditures are likely.

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Water: In March 2011, the EPA issued a proposed rule to regulate existing electric generating plant cooling water intake systems. Consumers is evaluating this proposed rule and its potential impacts on Consumers’ plants.

Advance Notice of Proposed Rulemaking on PCBs: In April 2010, the EPA issued an Advance Notice of Proposed Rulemaking, indicating that it is considering a variety of regulatory actions with respect to PCBs. One proposal aims to phase out equipment containing PCBs by 2025. Another proposal eliminates an exemption for small equipment containing PCBs. Consumers could incur substantial costs associated with the regulation of PCBs due to prior installation of electrical equipment potentially containing PCBs.

Other electric environmental matters could have a major impact on Consumers’ outlook. For additional details on other electric environmental matters, see Note 2, Contingencies and Commitments, “Consumers’ Electric Utility Contingencies — Electric Environmental Matters.”

Consumers’ Gas Utility Business Outlook and Uncertainties

Gas Deliveries: Consumers believes economic conditions in Michigan have stabilized, and expects weather-adjusted gas deliveries to increase in 2011 by one percent compared with 2010. Over the next five years, Consumers expects average gas deliveries to decline about one percent annually, reflecting the predicted effects of energy efficiency programs and continued conservation. Actual delivery levels from year to year may vary from this trend due to:

• fluctuations in weather;

• use by IPPs;

• availability and development of renewable energy sources;

• changes in gas prices;

• Michigan economic conditions, including population trends and housing activity;

• the price of competing energy sources or fuels; and

• energy efficiency and conservation.

A decoupling mechanism was authorized by the MPSC in Consumers’ 2009 gas rate case order, subject to certain conditions. It allows Consumers to adjust future gas rates to compensate for changes in sales volumes by class arising from the difference between the level of average sales per customer adopted in the order and actual average weather-adjusted sales per customer. The mechanism does not provide rate adjustments for changes in sales volumes arising from weather fluctuations. This mechanism mitigates the impacts of energy efficiency programs, conservation, and changes in economic conditions on its gas revenue.

Gas Rate Matters: Rate matters are critical to Consumers’ gas utility business. For details on Consumers’ gas rate case and GCR, see Note 3, Regulatory Matters, “Consumers’ Gas Utility.”

Gas Pipeline Safety: In response to the natural gas pipeline explosion that occurred in San Bruno, California in September 2010, the U.S. House of Representatives and the U.S. Senate have proposed bills stipulating stricter regulation of natural gas pipelines nationwide. These proposed bills affect primarily transmission pipelines, but distribution pipelines may also be affected. The proposed bills contain provisions mandating:

• the use of internal inspection devices or comparable methods effective in detecting pipeline deterioration;

• the installation of automatic shutoff equipment in high-consequence areas; and

• certain disclosures to homeowners and regulatory agencies.

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Consumers continues to comply with laws and regulations governing natural gas pipeline safety. If these proposed laws are put into effect, Consumers could incur significant additional costs related to its natural gas pipeline safety programs. Consumers expects that it would be able to recover the costs in rates, consistent with the recovery of other reasonable costs of complying with laws and regulations.

Gas Environmental Estimates: Consumers expects to incur response activity costs at a number of sites, including 23 former MGP sites. For additional details, see Note 2, Contingencies and Commitments, “Consumers’ Gas Utility Contingencies — Gas Environmental Matters.”

Consumers’ Other Outlook and Uncertainties

Smart Grid: Consumers’ grid modernization effort continues to move forward. The foundation of this effort is the installation of advanced metering and the infrastructure to support it. The installation will include smart meters that are capable of transmitting and receiving data, a two-way communications network, and modifications to Consumers’ existing information technology systems to manage the data and enable changes to key business processes. Consumers expects to experience operational benefits upon the installation of smart meters. Smart meters are also intended to allow customers to monitor and manage their energy usage and help reduce demand during critical peak times, resulting in lower peak capacity requirements. Due to this system’s complexity and the relative immaturity of the technology, Consumers intends to continue its phased implementation approach. In 2012, Consumers plans to begin a larger-scale deployment to expand testing of the operations and systems of the selected advanced metering infrastructure network communications vendor.

Enterprises Outlook and Uncertainties

The primary focus with respect to CMS Energy’s remaining non-utility businesses is to optimize cash flow and maximize the value of their assets.

Trends, uncertainties, and other matters that could have a material impact on CMS Energy’s consolidated income, cash flows, or financial position include:

• indemnity and environmental remediation obligations at Bay Harbor;

• the outcome of certain legal proceedings;

• impacts of declines in electricity prices on the profitability of the enterprises segment’s generating units;

• representations, warranties, and indemnities provided by CMS Energy or its subsidiaries in connection with previous sales of assets;

• changes in commodity prices and interest rates 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, practices, or in their interpretation; and

• economic conditions in Michigan, including population trends and housing activity.

For additional details regarding the enterprises segment’s uncertainties, see Note 2, Contingencies and Commitments.

Other Outlook and Uncertainties

Litigation: CMS Energy, Consumers, and certain of their subsidiaries are named as parties in various litigation matters, as well as in administrative proceedings before various courts and governmental agencies, arising in the ordinary course of business. For additional details regarding these and other legal matters, see Note 2, Contingencies and Commitments and Note 3, Regulatory Matters.

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EnerBank: EnerBank, a wholly owned subsidiary of CMS Capital, is a Utah state-chartered, FDIC-insured industrial bank providing unsecured home improvement loans. EnerBank represented one percent of CMS Energy’s net assets at March 31, 2011, and two percent of CMS Energy’s Net Income Available to Common Stockholders for the three months ended March 31, 2011. The carrying value of EnerBank’s loan portfolio was $380 million at March 31, 2011. Its loan portfolio was funded primarily by deposit liabilities of $377 million. Twelve-month rolling average default rates on loans held by EnerBank have declined from 1.4 percent at December 31, 2010 to 1.3 percent at March 31, 2011. EnerBank expects the rate of loan defaults to decline further, and to level out at about 1.0 percent. CMS Energy is required to ensure that EnerBank remains well capitalized.

NEW ACCOUNTING STANDARDS

There were no implementations of new accounting standards that had a material impact on CMS Energy’s or Consumers’ consolidated financial statements. Also, there are no new accounting standards issued but not yet effective that are expected to have a material impact on CMS Energy’s or Consumers’ consolidated financial statements.

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CMS Energy Corporation

Consolidated Statements of Income
(Unaudited)

				In Millions
Three Months Ended March 31	2011			2010
Operating Revenue	$	2,055		$	1,967
Operating Expenses
Fuel for electric generation		152			138
Purchased and interchange power		300			278
Purchased power — related parties		21			21
Cost of gas sold		768			778
Maintenance and other operating expenses		279			275
Depreciation and amortization		162			172
General taxes		67			66
Total operating expenses		1,749			1,728
Operating Income		306			239
Other Income (Expense)
Interest		2			5
Allowance for equity funds used during construction		1			1
Income from equity method investees		4			3
Other income		4			9
Other expense		(2	)		(2	)
Total other income		9			16
Interest Charges
Interest on long-term debt		100			98
Other interest		6			8
Allowance for borrowed funds used during construction		(1	)		(1	)
Total interest charges		105			105
Income Before Income Taxes		210			150
Income Tax Expense		77			61
Income From Continuing Operations		133			89
Income (Loss) From Discontinued Operations, Net of Tax Expense (Benefit) of $1 and $(1)		2			(1	)
Net Income		135			88
Preferred Stock Dividends		—			3
Net Income Available to Common Stockholders	$	135		$	85

The accompanying notes are an integral part of these statements.

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	In Millions, Except Per Share Amounts
Three Months Ended March 31	2011		2010
Net Income Attributable to Common Stockholders
Amounts Attributable to Continuing Operations	$	133	$	86
Amounts Attributable to Discontinued Operations		2		(1	)
Net Income Available to Common Stockholders	$	135	$	85
Basic Earnings Per Average Common Share
Basic Earnings from Continuing Operations	$	0.53	$	0.38
Basic Earnings (Loss) from Discontinued Operations		0.01		(0.01	)
Basic Earnings Attributable to Common Stock	$	0.54	$	0.37
Diluted Earnings Per Average Common Share
Diluted Earnings from Continuing Operations	$	0.51	$	0.35
Diluted Earnings (Loss) from Discontinued Operations		0.01		(0.01	)
Diluted Earnings Attributable to Common Stock	$	0.52	$	0.34
Dividends Declared Per Common Share	$	0.21	$	0.15

31

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32

CMS Energy Corporation
Consolidated Statements of Cash Flows
(Unaudited)

	In Millions
Three Months ended March 31	2011			2010
Cash Flows from Operating Activities
Net Income	$	135		$	88
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		162			172
Deferred income taxes and investment tax credit		73			42
Postretirement benefits expense		40			49
Other non-cash operating activities		21			21
Postretirement benefits contributions		(19	)		(135	)
Changes in other assets and liabilities:
Decrease in accounts receivable, notes receivable, and accrued revenue		9			36
Decrease in accrued power supply revenue		15			38
Decrease in inventories		462			460
Decrease in accounts payable		(9	)		(44	)
Decrease in accrued expenses		(89	)		(77	)
Decrease in other current and non-current assets		29			39
Increase (decrease) in other current and non-current liabilities		12			(32	)
Net cash provided by operating activities		841			657
Cash Flows from Investing Activities
Capital expenditures (excludes assets placed under capital lease)		(191	)		(190	)
Cost to retire property		(17	)		(11	)
Cash effect of deconsolidation of partnerships		—			(10	)
Other investing activities		(20	)		(1	)
Net cash used in investing activities		(228	)		(212	)
Cash Flows from Financing Activities
Proceeds from issuance of long-term debt		—			300
Proceeds from EnerBank notes, net		13			25
Retirement of long-term debt		(13	)		(34	)
Payment of common stock dividends		(53	)		(34	)
Payment of capital and finance lease obligations		(6	)		(6	)
Other financing costs		(2	)		(30	)
Net cash (used in) provided by financing activities		(61	)		221
Net Increase in Cash and Cash Equivalents, Including Assets Held for Sale		552			666
Decrease (Increase) in Cash and Cash Equivalents Included in Assets Held for Sale		2			(1	)
Net Increase in Cash and Cash Equivalents		554			665
Cash and Cash Equivalents, Beginning of Period		247			90
Cash and Cash Equivalents, End of Period	$	801		$	755

The accompanying notes are an integral part of these statements.

33

CMS Energy Corporation
Consolidated Balance Sheets
(Unaudited)

	In Millions
	March 31		December 31
ASSETS	2011		2010
Current Assets
Cash and cash equivalents	$	801	$	247
Restricted cash and cash equivalents		30		23
Accounts receivable and accrued revenue, less allowances of $25 in 2011 and 2010		930		981
Notes receivable		55		70
Accounts receivable — related parties		11		10
Accrued power supply revenue		—		15
Inventories at average cost
Gas in underground storage		480		946
Materials and supplies		106		104
Generating plant fuel stock		126		125
Deferred property taxes		149		180
Regulatory assets		14		19
Assets held for sale		—		2
Prepayments and other current assets		39		37
Total current assets		2,741		2,759
Plant, Property & Equipment (at cost)
Plant, property & equipment, gross		14,242		14,145
Less accumulated depreciation, depletion, and amortization		4,731		4,646
Plant, property & equipment, net		9,511		9,499
Construction work in progress		627		570
Total plant, property & equipment		10,138		10,069
Non-current Assets
Regulatory assets		2,079		2,093
Accounts and notes receivable, less allowances of $5 in 2011 and 2010		381		397
Investments		51		49
Assets held for sale		—		4
Other non-current assets		252		245
Total non-current assets		2,763		2,788
Total Assets	$	15,642	$	15,616

The accompanying notes are an integral part of these statements.

34

	In Millions
	March 31			December 31
LIABILITIES AND EQUITY	2011			2010
Current Liabilities
Current portion of long-term debt, capital and finance lease obligations	$	1,275		$	750
Accounts payable		413			492
Accounts payable — related parties		8			9
Accrued rate refunds		20			19
Accrued interest		75			102
Accrued taxes		239			302
Deferred income taxes		150			180
Regulatory liabilities		1			22
Liabilities held for sale		—			1
Other current liabilities		109			144
Total current liabilities		2,290			2,021
Non-current Liabilities
Long-term debt		5,926			6,448
Non-current portion of capital and finance lease obligations		182			188
Regulatory liabilities		2,048			1,988
Postretirement benefits		1,135			1,135
Asset retirement obligations		249			245
Deferred investment tax credit		48			49
Deferred income taxes		545			438
Other non-current liabilities		288			267
Total non-current liabilities		10,421			10,758
Commitments and Contingencies (Notes 2, 3, 4, 6, and 7)
Equity
Common stockholders’ equity
Common stock, authorized 350.0 shares; outstanding 250.8 shares in 2011 and 249.6 shares in 2010		3			2
Other paid-in capital		4,599			4,588
Accumulated other comprehensive loss		(40	)		(40	)
Accumulated deficit		(1,675	)		(1,757	)
Total common stockholders’ equity		2,887			2,793
Noncontrolling interests		44			44
Total equity		2,931			2,837
Total Liabilities and Equity	$	15,642		$	15,616

35

CMS Energy Corporation
Consolidated Statements of Changes in Equity
(Unaudited)

	In Millions
Three Months Ended March 31	2011			2010
Common Stock
At beginning of period	$	2		$	2
Common stock issued		1			—
At end of period		3			2
Other Paid-in Capital
At beginning of period		4,588			4,560
Common stock issued		6			4
Common stock reissued		5			—
At end of period		4,599			4,564
Accumulated Other Comprehensive Loss
Retirement benefits liability
At beginning of period		(39	)		(32	)
Retirement benefits liability adjustments1		—			1
At end of period		(39	)		(31	)
Derivative instruments
At beginning and end of period		(1	)		(1	)
At end of period		(40	)		(32	)
Accumulated Deficit
At beginning of period		(1,757	)		(1,927	)
Net income1		135			88
Common stock dividends declared		(53	)		(34	)
Preferred stock dividends declared		—			(3	)
At end of period		(1,675	)		(1,876	)
Preferred Stock
At beginning and end of period		—			239
Noncontrolling Interests
At beginning of period		44			97
Distributions and other changes in noncontrolling interests		—			(53	)
At end of period		44			44
Total Equity	$	2,931		$	2,941

36

CMS Energy Corporation
Consolidated Statements of Changes in Equity
(Unaudited)

	In Millions
Three Months Ended March 31	2011		2010
1 Disclosure of Comprehensive Income:
Net income	$	135	$	88
Retirement benefits liability:
Retirement benefits liability adjustments, net of tax benefit of $ - in 2011 and $1 in 2010		—		1
Total Comprehensive Income	$	135	$	89

The accompanying notes are an integral part of these statements.

37

Consumers Energy Company
Consolidated Statements of Income
(Unaudited)

	In Millions
Three Months Ended March 31	2011			2010
Operating Revenue	$	1,988		$	1,890
Operating Expenses
Fuel for electric generation		129			125
Purchased and interchange power		293			277
Purchased power — related parties		21			21
Cost of gas sold		753			746
Maintenance and other operating expenses		265			262
Depreciation and amortization		161			171
General taxes		66			64
Total operating expenses		1,688			1,666
Operating Income		300			224
Other Income (Expense)
Interest		2			5
Allowance for equity funds used during construction		1			1
Other income		8			9
Other expense		(2	)		(2	)
Total other income		9			13
Interest Charges
Interest on long-term debt		63			63
Other interest		4			6
Allowance for borrowed funds used during construction		(1	)		(1	)
Total interest charges		66			68
Income Before Income Taxes		243			169
Income Tax Expense		90			62
Net Income Available to Common Stockholder	$	153		$	107

The accompanying notes are an integral part of these statements.

38

Consumers Energy Company

Consolidated Statements of Cash Flows
(Unaudited)

	In Millions
Three Months ended March 31	2011			2010
Cash Flows from Operating Activities
Net Income	$	153		$	107
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		161			171
Deferred income taxes and investment tax credit		39			(19	)
Postretirement benefits expense		39			48
Other non-cash operating activities		17			19
Postretirement benefits contributions		(19	)		(125	)
Changes in other assets and liabilities:
Decrease in accounts receivable, notes receivable, and accrued revenue		6			31
Decrease in accrued power supply revenue		15			38
Decrease in inventories		458			459
Increase (decrease) in accounts payable		3			(49	)
Decrease in accrued expenses		(49	)		(28	)
Decrease in other current and non-current assets		30			44
Increase (decrease) in other current and non-current liabilities		14			(13	)
Net cash provided by operating activities		867			683
Cash Flows from Investing Activities
Capital expenditures (excludes assets placed under capital lease)		(186	)		(190	)
Cost to retire property		(17	)		(11	)
Other investing activities		(25	)		(1	)
Net cash used in investing activities		(228	)		(202	)
Cash Flows from Financing Activities
Retirement of long-term debt		(9	)		(9	)
Payment of common stock dividends		(104	)		(114	)
Stockholder’s contribution		125			200
Payment of capital and finance lease obligations		(6	)		(6	)
Other financing costs		(3	)		—
Net cash provided by financing activities		3			71
Net Increase in Cash and Cash Equivalents		642			552
Cash and Cash Equivalents, Beginning of Period		71			39
Cash and Cash Equivalents, End of Period	$	713		$	591

The accompanying notes are an integral part of these statements.

39

Consumers Energy Company
Consolidated Balance Sheets
(Unaudited)

	In Millions
	March 31		December 31
ASSETS	2011		2010
Current Assets
Cash and cash equivalents	$	713	$	71
Restricted cash and cash equivalents		29		23
Accounts receivable and accrued revenue, less allowances of $23 in 2011 and 2010		915		963
Notes receivable		41		55
Accrued power supply revenue		—		15
Accounts receivable — related parties		1		1
Inventories at average cost
Gas in underground storage		480		941
Materials and supplies		102		100
Generating plant fuel stock		126		124
Deferred property taxes		149		180
Regulatory assets		14		19
Prepayments and other current assets		30		27
Total current assets		2,600		2,519
Plant, Property & Equipment (at cost)
Plant, property & equipment, gross		14,115		14,022
Less accumulated depreciation, depletion, and amortization		4,678		4,593
Plant, property & equipment, net		9,437		9,429
Construction work in progress		622		566
Total plant, property & equipment		10,059		9,995
Non-current Assets
Regulatory assets		2,079		2,093
Accounts and notes receivable		14		22
Investments		31		34
Other non-current assets		174		176
Total non-current assets		2,298		2,325
Total Assets	$	14,957	$	14,839

The accompanying notes are an integral part of these statements.

40

	In Millions
	March 31		December 31
LIABILITIES AND EQUITY	2011		2010
Current Liabilities
Current portion of long-term debt, capital and finance lease obligations	$	361	$	61
Accounts payable		403		471
Accounts payable — related parties		11		11
Accrued rate refunds		20		19
Accrued interest		41		74
Accrued taxes		182		199
Deferred income taxes		192		209
Regulatory liabilities		1		22
Other current liabilities		76		95
Total current liabilities		1,287		1,161
Non-current Liabilities
Long-term debt		4,179		4,488
Non-current portion of capital and finance lease obligations		182		188
Regulatory liabilities		2,048		1,988
Postretirement benefits		1,076		1,076
Asset retirement obligations		248		244
Deferred investment tax credit		48		49
Deferred income taxes		1,348		1,289
Other non-current liabilities		187		176
Total non-current liabilities		9,316		9,498
Commitments and Contingencies (Notes 2, 3, 4, 6, and 7)
Equity
Common stockholder’s equity
Common stock, authorized 125.0 shares; outstanding 84.1 shares for both periods		841		841
Other paid-in capital		2,957		2,832
Retained earnings		512		463
Total common stockholder’s equity		4,310		4,136
Preferred stock		44		44
Total equity		4,354		4,180
Total Liabilities and Equity	$	14,957	$	14,839

41

Consumers Energy Company
Consolidated Statements of Changes in Equity
(Unaudited)

	In Millions
Three Months Ended March 31	2011			2010
Common Stock
At beginning and end of period	$	841		$	841
Other Paid-in Capital
At beginning of period		2,832			2,582
Stockholder’s contribution		125			200
At end of period		2,957			2,782
Accumulated Other Comprehensive Income
Retirement benefits liability
At beginning of period		(16	)		(11	)
Retirement benefits liability adjustments1		1			—
At end of period		(15	)		(11	)
Investments
At beginning of period		16			13
Unrealized loss on investments1		(1	)		(1	)
At end of period		15			12
At end of period		—			1
Retained Earnings
At beginning of period		463			389
Net income1		153			107
Common stock dividends declared		(104	)		(114	)
At end of period		512			382
Preferred Stock
At beginning and end of period		44			44
Total Equity	$	4,354		$	4,050

The accompanying notes are an integral part of these statements.

42

	In Millions
Three Months Ended March 31	2011			2010
1 Disclosure of Comprehensive Income:
Net income	$	153		$	107
Retirement benefits liability:
Retirement benefits liability adjustments, net of tax of $ - in 2011 and $ - in 2010		1			—
Investments:
Unrealized loss on investments, net of tax of $(1) in 2011 and $ - in 2010		(1	)		(1	)
Total Comprehensive Income	$	153		$	106

43

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44

CMS Energy Corporation
Consumers Energy Company

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

These interim Consolidated Financial Statements have been prepared by CMS Energy and Consumers in accordance with accounting principles generally accepted in the U.S. for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. As a result, CMS Energy and Consumers have condensed or omitted certain information and Note disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the U.S. CMS Energy and Consumers have reclassified certain prior period amounts to conform to the presentation in the current period. In management’s opinion, the unaudited information contained in this report reflects all adjustments of a normal recurring nature necessary to ensure the fair presentation of financial position, results of operations, and cash flows for the periods presented. The Notes to Consolidated Financial Statements and the related Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and related Notes contained in the 2010 Form 10-K. Due to the seasonal nature of CMS Energy’s and Consumers’ operations, the results presented for this interim period are not necessarily indicative of results to be achieved for the fiscal year.

1: FAIR VALUE MEASUREMENTS

Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. When measuring fair value, CMS Energy and Consumers are required to incorporate all assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. A fair value hierarchy prioritizes inputs used to measure fair value according to their observability in the market. The three levels of the fair value hierarchy are as follows:

• Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

• Level 2 inputs are observable, market-based inputs, other than Level 1 prices. Level 2 inputs may include quoted prices for similar assets or liabilities in active markets, quoted prices in inactive markets, interest rates and yield curves observable at commonly quoted intervals, credit risks, default rates, and inputs derived from or corroborated by observable market data.

• Level 3 inputs are unobservable inputs that reflect CMS Energy’s or Consumers’ own assumptions about how market participants would value their assets and liabilities.

To the extent possible, CMS Energy and Consumers use quoted market prices or other observable market pricing data in valuing assets and liabilities measured at fair value. If this information is unavailable, they use market-corroborated data or reasonable estimates about market participant assumptions. CMS Energy and Consumers classify fair value measurements within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement in its entirety.

45

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Presented in the following table are CMS Energy’s and Consumers’ assets and liabilities, by level within the fair value hierarchy, reported at fair value on a recurring basis at March 31, 2011:

							In Millions
	Total		Level 1		Level 2			Level 3
CMS Energy, including Consumers
Assets:
Cash equivalents	$	656	$	656	$	—		$	—
Restricted cash equivalents		14		14		—			—
Nonqualified deferred compensation plan assets		4		4		—			—
SERP:
Cash equivalents		1		1		—			—
Mutual fund		89		89		—			—
State and municipal bonds		27		—		27			—
Derivative instruments:
Commodity contracts1		1		—		—			1
Total2	$	792	$	764	$	27		$	1
Liabilities:
Nonqualified deferred compensation plan liabilities	$	4	$	4	$	—		$	—
Derivative instruments:
Commodity contracts3		3		—		—			3
Total4	$	7	$	4	$	—		$	3
Consumers
Assets:
Cash equivalents	$	596	$	596	$	—		$	—
Restricted cash equivalents		13		13		—			—
CMS Energy common stock		31		31		—			—
Nonqualified deferred compensation plan assets		3		3		—			—
SERP:
Mutual fund		58		58		—			—
State and municipal bonds		18		—		18			—
Total	$	719	$	701	$	18		$	—
Liabilities:
Nonqualified deferred compensation plan liabilities	$	3	$	3	$	—		$	—
Total	$	3	$	3	$	—		$	—

1	This amount is gross and excludes the impact of offsetting derivative assets and liabilities under master netting arrangements, which was less than $1 million at March 31, 2011.
2	At March 31, 2011, CMS Energy’s assets classified as Level 3 represented less than one percent of CMS Energy’s total assets measured at fair value.
3	This amount is gross and excludes the impact of offsetting derivative assets and liabilities under master netting arrangements and offsetting cash margin deposits paid by CMS ERM to other parties, which was less than $1 million at March 31, 2011.
4	At March 31, 2011, CMS Energy’s liabilities classified as Level 3 represented 43 percent of CMS Energy’s total liabilities measured at fair value. The Level 3 liabilities consisted primarily of an electricity sales agreement held by CMS ERM.

46

Presented in the following table are CMS Energy’s and Consumers’ assets and liabilities, by level within the fair value hierarchy, reported at fair value on a recurring basis at December 31, 2010:

							In Millions
	Total		Level 1		Level 2			Level 3
CMS Energy, including Consumers
Assets:
Cash equivalents	$	183	$	183	$	—		$	—
Restricted cash equivalents		6		6		—			—
Nonqualified deferred compensation plan assets		6		6		—			—
SERP:
Cash equivalents		1		1		—			—
Mutual fund		62		62		—			—
State and municipal bonds		28		—		28			—
Derivative instruments:
Commodity contracts1		1		—		—			1
Total2	$	287	$	258	$	28		$	1
Liabilities:
Nonqualified deferred compensation plan liabilities	$	6	$	6	$	—		$	—
Derivative instruments:
Commodity contracts3		4		—		—			4
Total4	$	10	$	6	$	—		$	4
Consumers
Assets:
Cash equivalents	$	19	$	19	$	—		$	—
Restricted cash equivalents		6		6		—			—
CMS Energy common stock		34		34		—			—
Nonqualified deferred compensation plan assets		4		4		—			—
SERP:
Cash equivalents		1		1		—			—
Mutual fund		39		39		—			—
State and municipal bonds		17		—		17			—
Derivative instruments:
Commodity contracts		1		—		—			1
Total5	$	121	$	103	$	17		$	1
Liabilities:
Nonqualified deferred compensation plan liabilities	$	4	$	4	$	—		$	—
Total	$	4	$	4	$	—		$	—

1	This amount is gross and excludes the impact of offsetting derivative assets and liabilities under master netting arrangements, which was less than $1 million at December 31, 2010.
2	At December 31, 2010, CMS Energy’s assets classified as Level 3 represented less than one percent of CMS Energy’s total assets measured at fair value.
3	This amount is gross and excludes the impact of offsetting derivative assets and liabilities under master netting arrangements and offsetting cash margin deposits paid by CMS ERM to other parties, which was less than $1 million at December 31, 2010.
4	At December 31, 2010, CMS Energy’s liabilities classified as Level 3 represented 40 percent of CMS Energy’s total liabilities measured at fair value. The Level 3 liabilities consisted primarily of an electricity sales agreement held by CMS ERM.
5	At December 31, 2010, Consumers’ assets classified as Level 3 represented one percent of Consumers’ total assets measured at fair value.

47

Cash Equivalents: Cash equivalents and restricted cash equivalents consist of money market funds with daily liquidity. The funds invest in U.S. Treasury notes, other government-backed securities, and repurchase agreements collateralized by U.S. Treasury notes.

Nonqualified Deferred Compensation Plan Assets: CMS Energy’s and Consumers’ nonqualified deferred compensation plan assets are invested in various mutual funds. CMS Energy and Consumers value these assets using a market approach, using the daily quoted NAVs provided by the fund managers that are the basis for transactions to buy or sell shares in each fund. CMS Energy and Consumers report these assets in Other non-current assets on their Consolidated Balance Sheets.

SERP Assets: CMS Energy and Consumers value their SERP assets using a market approach, incorporating prices and other relevant information from market transactions. The SERP cash equivalents consist of a money market fund with daily liquidity, which invests in state and municipal securities.

The SERP invests in a short-term, fixed-income mutual fund that holds a variety of debt securities with average maturities of one to three years. The fund invests primarily in investment-grade debt securities but, in order to achieve its investment objective, it may invest a portion of its assets in high-yield securities, foreign debt, and derivative instruments. The fair value of the fund is determined using the daily published NAV, which is the basis for transactions to buy or sell shares in the fund.

The SERP state and municipal bonds are investment grade securities that are valued using a matrix pricing model that incorporates Level 2 market-based information. The fair value of the bonds is derived from various observable inputs, including benchmark yields, reported trades, broker/dealer quotes, bond ratings, and general information on market movements normally considered by market participants when pricing such debt securities. CMS Energy and Consumers report their SERP assets in Other non-current assets on their Consolidated Balance Sheets. For additional details about SERP securities, see Note 6, Financial Instruments.

Nonqualified Deferred Compensation Plan Liabilities: CMS Energy and Consumers value their non-qualified deferred compensation plan liabilities based on the fair values of the plan assets, as they reflect what is owed to the plan participants in accordance with their investment elections. CMS Energy and Consumers report these liabilities in Other non-current liabilities on their Consolidated Balance Sheets.

Derivative Instruments: CMS Energy and Consumers value their derivative instruments using either a market approach that incorporates information from market transactions, or an income approach that discounts future expected cash flows to a present value amount. They use various inputs to value the derivatives depending on the type of contract and the availability of market data. CMS Energy has exchange-traded derivative contracts that are valued based on Level 1 quoted prices in actively traded markets, as well as derivatives that are valued using Level 2 inputs, including commodity market prices, interest rates, credit ratings, default rates, and market-based seasonality factors. CMS Energy and Consumers have classified certain derivatives as Level 3 since the fair value measurements incorporate pricing assumptions that cannot be observed or confirmed through market transactions.

The most significant derivative classified as Level 3 is an electricity sales agreement held by CMS ERM. At December 31, 2010 and in prior periods, quoted electricity prices were not available for the entire term of the agreement, and a proprietary forward pricing model was used to determine fair value. At March 31, 2011, quoted prices at the nearest active market were available for the entire term of the agreement. The agreement, however, remains classified as Level 3 since the pricing differential between the nearest active market in Ohio and the delivery point in Michigan cannot be confirmed with observable, market transactions.

48

For all fair values other than Level 1 prices, CMS Energy and Consumers incorporate adjustments for the risk of nonperformance. For derivative assets, a credit adjustment is applied against the asset based on the published default rate for the credit rating that CMS Energy and Consumers assign to the counterparty based on an internal credit-scoring model. This model considers various inputs, including the counterparty’s financial statements, credit reports, trade press, and other information that would be available to market participants. To the extent that the internal ratings are comparable to credit ratings published by independent rating agencies, the resulting credit adjustment is classified within Level 2. If the internal model results in a rating that is outside of the range of ratings given by the independent agencies and the credit adjustment is significant to the overall valuation, the derivative fair value is classified as Level 3. CMS Energy and Consumers adjust their derivative liabilities downward to reflect the risk of their own nonperformance, based on their published credit ratings. CMS Energy and Consumers monitor market conditions and may incorporate other data, such as credit default swap rates, in determining adjustments for credit risk as warranted. For additional details about derivative contracts, see Note 7, Derivative Instruments.

Assets and Liabilities Measured at Fair Value on a Recurring Basis using Significant Level 3 Inputs

Presented in the following table is a reconciliation of changes in the fair values of Level 3 assets and liabilities at CMS Energy, which includes Level 3 assets and liabilities at Consumers:

				In Millions
Three Months Ended March 31	2011				2010
Balance at January 1	$	(3	)		$	(8	)
Total gains included in earnings1		2				4
Settlements		(1	)			1
Balance at March 31	$	(2	)		$	(3	)
Unrealized gains included in earnings for the three months ended March 31 relating to assets and liabilities still held at March 311	$	1			$	4

¹ CMS Energy records realized and unrealized gains and losses for Level 3 recurring fair values in earnings as a component of Operating Revenue, Other income, or Maintenance and other operating expenses on its Consolidated Statements of Income.

No further detail is provided on Consumers’ Level 3 assets, due to the immateriality of the amounts.

2: CONTINGENCIES AND COMMITMENTS

CMS Energy Contingencies

Gas Index Price Reporting Investigation: In 2002, CMS Energy notified appropriate regulatory and governmental agencies that some employees at CMS MST and CMS Field Services appeared to have provided inaccurate information regarding natural gas trades to various energy industry publications, which compile and report index prices. CMS Energy cooperated with an investigation by the DOJ regarding this matter. Although CMS Energy has not received any formal notification that the DOJ has completed its investigation, the DOJ’s last request for information occurred in 2003, and CMS Energy completed its response to this request in 2004. CMS Energy is unable to predict the outcome of the DOJ investigation and what effect, if any, the investigation will have on CMS Energy.

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Gas Index Price Reporting Litigation: CMS Energy, along with CMS MST, CMS Field Services, Cantera Natural Gas, Inc., and Cantera Gas Company, are named as defendants in various class action and individual lawsuits arising as a result of alleged inaccurate natural gas price reporting to publications that report trade information. Allegations include manipulation of NYMEX natural gas futures and options prices, price-fixing conspiracies, restraint of trade, and artificial inflation of natural gas retail prices in Colorado, Kansas, Missouri, and Wisconsin. The following provides more detail on these proceedings:

• In 2005, CMS MST was served with a summons and complaint that named CMS Energy, CMS MST, and CMS Field Services as defendants in a putative class action filed in Kansas state court, Learjet, Inc., et al. v. Oneok, Inc., et al. The complaint alleges that during the putative class period, January 1, 2000 through October 31, 2002, the defendants engaged in a scheme to violate the Kansas Restraint of Trade Act. The plaintiffs, who allege they purchased natural gas from the defendants and others for their facilities, are seeking statutory full consideration damages consisting of the full consideration paid by plaintiffs for natural gas.

• In 2007, a class action complaint, Heartland Regional Medical Center, et al. v. Oneok, Inc. et al., was filed in Missouri state court alleging violations of Missouri antitrust laws. Defendants, including CMS Energy, CMS Field Services, and CMS MST, are alleged to have violated the Missouri antitrust law in connection with their natural gas price reporting activities.

• Breckenridge Brewery of Colorado, LLC and BBD Acquisition Co. v. Oneok, Inc., et al., a class action complaint brought on behalf of retail direct purchasers of natural gas in Colorado, was filed in Colorado state court in May 2006. Defendants, including CMS Energy, CMS Field Services, and CMS MST, are alleged to have violated the Colorado Antitrust Act of 1992 in connection with their natural gas price reporting activities. Plaintiffs are seeking full refund damages.

• A class action complaint, Arandell Corp., et al. v. XCEL Energy Inc., et al., was filed in 2006 in Wisconsin state court on behalf of Wisconsin commercial entities that purchased natural gas between January 1, 2000 and October 31, 2002. The defendants, including CMS Energy, CMS ERM, and Cantera Gas Company, are alleged to have violated Wisconsin’s antitrust statute. The plaintiffs are seeking full consideration damages, plus exemplary damages and attorneys’ fees. After dismissal on jurisdictional grounds in 2009, plaintiffs filed a new case in the U.S. District Court for the Eastern District of Michigan. In November 2010, the MDL judge issued an opinion and order granting the CMS Energy defendants’ motion to dismiss the new Michigan case on statute-of-limitations grounds and all CMS Energy defendants have been dismissed from the Arandell Michigan case.

• Another class action complaint, Newpage Wisconsin System v. CMS ERM, CMS Energy, and Cantera Gas Company, was filed in 2009 in circuit court in Wood County, Wisconsin, against CMS Energy defendants and 19 other non-CMS Energy companies. The plaintiff is seeking full consideration damages, treble damages, costs, interest, and attorneys’ fees.

• In 2005, J.P. Morgan Trust Company, in its capacity as Trustee of the FLI Liquidating Trust, filed an action in Kansas state court against a number of energy companies, including CMS Energy, CMS MST, and CMS Field Services. The complaint alleges various claims under the Kansas Restraint of Trade Act. The plaintiff is seeking statutory full consideration damages for its purchases of natural gas between January 1, 2000 and December 31, 2001. This case is not a class action.

After removal to federal court, the Learjet, Heartland, Breckenridge, both Arandell cases, Newpage, and J.P. Morgan cases were transferred to the MDL case. CMS Energy was dismissed from the Learjet, Heartland, and J.P. Morgan cases in 2009, but other CMS Energy defendants remain parties. All

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CMS Energy defendants were dismissed from the Breckenridge case in 2009. It is expected that the plaintiffs in this case will appeal this decision after all claims against defendants have been dismissed. At this time, there is no pending appeal. In June 2010, CMS Energy and Cantera Gas Company were dismissed from the Newpage case; the Arandell (Wisconsin) case was reinstated against CMS ERM; and the Arandell (Wisconsin) case was consolidated with the Newpage case. These two consolidated cases remain pending only against CMS ERM. Pending before the court in all of the MDL cases are the defendants’ renewed motions for summary judgment based on FERC preemption. In all but the J.P. Morgan case, there are also pending plaintiffs’ motions for class certification. These motions are not yet decided. In October 2010, the MDL court entered an order denying the plaintiffs’ motion for leave to amend their complaint to add a federal Sherman Antitrust Act claim.

These cases involve complex facts, a large number of similarly situated defendants with different factual positions, and multiple jurisdictions. Presently, any estimate of liability would be highly speculative; the amount of CMS Energy’s possible loss would be based on widely varying models previously untested in this context. Defenses are being pursued vigorously, which could result in the dismissal of the cases completely, but CMS Energy is unable to predict the outcome of these matters. If the outcome is unfavorable, these cases could have a material adverse impact on CMS Energy’s liquidity, financial condition, and results of operations.

Bay Harbor: As part of the development of Bay Harbor by certain subsidiaries of CMS Energy, and under an agreement with the MDEQ, third parties constructed a golf course and park over several abandoned CKD piles left over from the former cement plant operations on the Bay Harbor site. The third parties also undertook a series of response activities, including constructing a leachate collection system in one area where CKD-impacted groundwater was entering Little Traverse Bay. Leachate is produced when water enters into the CKD piles. In 2002, CMS Energy sold its interest in Bay Harbor, but retained its obligations under environmental indemnities entered into at the start of the project.

In 2005, the EPA, along with CMS Land and CMS Capital, voluntarily executed an Administrative Order on Consent under Superfund, and the EPA approved a Removal Action Work Plan to address contamination issues. Collection systems required under the plan have been installed and effectiveness monitoring of the systems at the shoreline is ongoing. CMS Land, CMS Capital, and the EPA agreed upon augmentation measures to address areas where pH measurements were not satisfactory. Several augmentation measures were implemented and completed in 2009, with the remaining measure completed in 2010.

In December 2010, CMS Energy submitted a revised scope of remedies to the EPA for approval and is awaiting a response from the EPA regarding its submission. Also in December 2010, the MDEQ issued an NPDES permit that authorizes CMS Land to discharge treated leachate into Little Traverse Bay. This permit requires renewal every five years. Additionally, CMS Land has committed to investigate the potential for a deep injection well on the Bay Harbor site as an alternative long-term solution to the leachate disposal issue. In 2008, the MDEQ and the EPA granted permits for CMS Land or its wholly owned subsidiary, Beeland Group LLC, to construct and operate an off-site deep injection well in Antrim County, Michigan, to dispose of leachate from Bay Harbor. Certain environmental groups, a local township, and a local county filed lawsuits appealing the permits. The legal proceeding was stayed in 2009 and can be renewed by either party at any time.

Various claims have been brought against CMS Land or its affiliates, including CMS Energy, alleging environmental damage to property, loss of property value, insufficient disclosure of environmental matters, breach of agreement relating to access, or other matters. In October 2010, CMS Land and other parties received a demand for payment from the EPA in the amount of $7 million, plus interest, whereby the EPA is seeking recovery, as allowed under Superfund, of the EPA’s response costs incurred at the Bay Harbor site. CMS Land believes that this is not a valid claim and intends to dispute it.

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CMS Land and CMS Capital, the MDEQ, the EPA, and other parties continue to negotiate the long-term remedy for the Bay Harbor site, including:

• the disposal of leachate;

• the capping and excavation of CKD;

• the location and design of collection lines and upstream water diversion systems;

• application of criteria for various substances such as mercury; and

• other matters that are likely to affect the scope of response activities that CMS Land and CMS Capital may be obligated to undertake.

CMS Energy has recorded a cumulative charge related to Bay Harbor of $223 million, which includes accretion expense. At March 31, 2011, CMS Energy had a recorded liability of $94 million for its remaining obligations. CMS Energy calculated this liability based on discounted projected costs, using a discount rate of 4.34 percent and an inflation rate of one percent on annual operating and maintenance costs. CMS Energy based the discount rate on the interest rate for 30-year U.S. Treasury securities at December 31, 2010. The undiscounted amount of the remaining obligation is $115 million. CMS Energy expects to pay $23 million during the remainder of 2011, $16 million in 2012, $7 million in 2013, $5 million in 2014, $4 million in 2015, and the remaining amount thereafter on long-term liquid disposal and operating and maintenance costs.

CMS Energy’s estimate of response activity costs and the timing of expenditures could change if there are additional major changes in circumstances or assumptions, including but not limited to:

• inability to complete the present long-term water disposal strategy at a reasonable cost;

• delays in implementing the present long-term water disposal strategy;

• requirements to alter the present long-term water disposal strategy upon expiration of the NPDES permit if the MDEQ or EPA identify a more suitable alternative;

• an increase in the number of contamination areas;

• different remediation techniques;

• the nature and extent of contamination;

• inability to reach agreement with the MDEQ or the EPA over additional response activities;

• delays in the receipt of requested permits;

• delays following the receipt of any requested permits due to legal appeals of third parties;

• additional or new legal or regulatory requirements; or

• new or different landowner claims.

Depending on the size of any indemnity obligation or liability under environmental laws, an adverse outcome of this matter could have a material adverse effect on CMS Energy’s liquidity and financial condition and could negatively affect CMS Energy’s financial results. Although a liability for its present estimate of remaining response activity costs has been recorded, CMS Energy cannot predict the ultimate financial impact or outcome of this matter.

Equatorial Guinea Tax Claim: In 2004, CMS Energy received a request for indemnification from the purchaser of CMS Oil and Gas. The indemnity claim relates to the sale of CMS Energy’s oil, gas, and methanol projects in Equatorial Guinea and the claim of the government of Equatorial Guinea that CMS Energy owes $142 million in taxes in connection with that sale. CMS Energy concluded that the government’s tax claim is without merit and the purchaser of CMS Oil and Gas submitted a response to the government rejecting the claim. The government of Equatorial Guinea indicated in 2008 that it still intends to pursue its claim. CMS Energy cannot predict the financial impact or outcome of this matter.

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Consumers’ Electric Utility Contingencies

Electric Environmental Matters: Consumers’ operations are subject to environmental laws and regulations. Generally, Consumers has been able to recover, in customer rates, the costs to operate its facilities in compliance with these laws and regulations.

Cleanup and Solid Waste: Consumers expects to incur remediation and other response activity costs at a number of sites under NREPA. Consumers believes that these costs should be recoverable in rates, but cannot guarantee that outcome. At March 31, 2011, Consumers had a recorded liability of $1 million, its estimated probable NREPA liability.

Consumers is a potentially responsible party at a number of contaminated sites administered under the Superfund. Superfund liability is joint and several. In addition to Consumers, many other creditworthy parties with substantial assets are potentially responsible with respect to the individual sites. In November 2010, Consumers received official notification from the EPA that identified Consumers as a potentially responsible party at the Kalamazoo River Superfund site. The notification claimed that the EPA has reason to believe Consumers disposed of PCBs and arranged for the disposal and treatment of PCB-containing materials at portions of the site. Consumers responded to the EPA in December 2010, stating that it has no information showing that it disposed of PCBs or arranged for disposal or treatment of PCB-containing material at portions of the site and requesting further information from the EPA before Consumers would commit to perform or finance cleanup activities at the site. In April 2011, Consumers received a follow-up letter from the EPA requesting that Consumers, as a potentially responsible party at the Kalamazoo River Superfund site, agree to participate in a removal action plan along with several other companies. The letter also indicated that under Sections 106 and 107 of Superfund, Consumers may be liable for reimbursement of the EPA’s costs and potential penalties for noncompliance with any unilateral order that the EPA may issue requiring performance under the removal action plan. Until further information is received from the EPA, Consumers is unable to estimate a range of potential liability for cleanup of the river.

Based on its experience, Consumers estimates that its share of the total liability for other known Superfund sites will be between $2 million and $8 million. Various factors, including the number of potentially responsible parties involved with each site, affect Consumers’ share of the total liability. At March 31, 2011, Consumers had a recorded liability of $2 million, the minimum amount in the range of its estimated probable Superfund liability.

The timing of payments related to Consumers’ remediation and other response activities at its Superfund and NREPA sites is uncertain. Consumers periodically reviews these cost estimates. Any significant change in the underlying assumptions, such as an increase in the number of sites, different remediation techniques, nature and extent of contamination, and legal and regulatory requirements, could affect its estimates of NREPA and Superfund liability.

Ludington PCB: In 1998, during routine maintenance activities, Consumers identified PCB as a component in certain paint, grout, and sealant materials at Ludington. Consumers removed and replaced part of the PCB material with non-PCB material. Since proposing a plan to take action with respect to the remaining materials, Consumers has had several communications with the EPA. Consumers is not able to predict when the EPA will issue a final ruling and cannot predict the financial impact or outcome of this matter.

Electric Utility Plant Air Permit Issues and Notices of Violation: In 2007, Consumers received an NOV/FOV from the EPA alleging that fourteen utility boilers exceeded the visible emission limits in their associated air permits. Consumers has responded formally to the NOV/FOV denying the allegations. In addition, in 2008, Consumers received an NOV for three of its coal-fueled facilities alleging, among other things, violations of NSR PSD regulations relating to ten projects from 1986 to 1998 allegedly subject to NSR review. The EPA has alleged that some utilities have classified incorrectly major plant modifications as RMRR rather than seeking permits from the EPA or state regulatory agencies to modify their plants. Consumers responded to the information requests from the EPA on this subject in the past. Consumers believes that it has properly interpreted the requirements of RMRR.

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Consumers is engaged in discussions with the EPA on all of these matters. Depending upon the outcome of these discussions, the EPA could bring legal action against Consumers and/or Consumers could be required to install additional pollution control equipment at some or all of its coal-fueled electric generating plants, surrender emission allowances, engage in Supplemental Environmental Projects, and/or pay fines. Additionally, Consumers would need to assess the viability of continuing operations at certain plants. The potential costs relating to these matters could be material and the extent of cost recovery cannot be reasonably estimated. Although Consumers cannot predict the financial impact or outcome of these matters, Consumers expects that it would be able to recover some or all of the costs in rates, consistent with the recovery of other reasonable costs of complying with environmental laws and regulations.

Nuclear Matters: The matters discussed in this section relate to Consumers’ previously owned nuclear generating plants.

DOE Litigation: In 1997, a U.S. Court of Appeals decision confirmed that the DOE was to begin accepting deliveries of spent nuclear fuel for disposal by January 1998. Subsequent U.S. Court of Appeals litigation, in which Consumers and other utilities participated, has not been successful in producing more specific relief for the DOE’s failure to accept the spent nuclear fuel.

A number of court decisions support the right of utilities to pursue damage claims in the U.S. Court of Claims against the DOE for failure to take delivery of spent nuclear fuel. Consumers filed a complaint in 2002. If Consumers’ litigation against the DOE is successful, Consumers plans to use any recoveries as reimbursement for the incurred costs of spent nuclear fuel storage during Consumers’ ownership of Palisades and Big Rock. The sale of Palisades and the Big Rock ISFSI did not transfer the right to any recoveries from the DOE related to costs of spent nuclear fuel storage incurred during Consumers’ ownership of Palisades and Big Rock. Consumers is involved in ongoing discussions with the DOE to settle this lawsuit.

Nuclear Fuel Disposal Cost: Consumers has a recorded liability of $163 million to fund the disposal of spent nuclear fuel used before 1983. This balance comprises the principal amount of $44 million collected from customers for spent nuclear fuel disposal fees and $119 million of interest accrued on those collections. The liability, which is classified in Long-term debt on CMS Energy’s and Consumers’ Consolidated Balance Sheets, is payable to the DOE when it begins to accept delivery of spent nuclear fuel. In conjunction with the sale of Palisades and the Big Rock ISFSI in 2007, Consumers retained this obligation and provided a letter of credit to Entergy as security for this obligation. Consumers is involved in ongoing discussions with the DOE to settle this liability in conjunction with the settlement of Consumers’ lawsuit with the DOE. In its November 2010 electric rate order, the MPSC directed Consumers to establish, within six months of the date of the order, an independent trust fund for the amount payable to the DOE. In December 2010, Consumers filed a Petition for Rehearing and Clarification, requesting that the MPSC modify its conclusion that this amount be placed in a trust. In response to Consumers’ Petition for Rehearing and Clarification, the MPSC issued an order in March 2011 indicating it did not intend to prejudge the terms of any potential settlement agreement between Consumers and the DOE. The MPSC granted Consumers ninety days to finalize a settlement with the DOE. If a settlement agreement is reached, Consumers will be required to file the agreement with the MPSC to address how the settlement proceeds will be distributed and to allow interested parties to comment on the reasonableness and prudence of the agreement. If Consumers enters into a settlement, Consumers will be permitted to petition the MPSC to relieve it of the obligation to fund all or any part of the trust. If Consumers does not enter into a settlement, it will be required to establish the independent trust fund required by the November 2010 electric rate order.

Consumers’ Gas Utility Contingencies

Gas Environmental Matters: Consumers expects to incur remediation and other response activity costs at a number of sites under the NREPA. These sites include 23 former MGP facilities. Consumers

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operated the facilities on these sites for some part of their operating lives. For some of these sites, Consumers has no present ownership interest or may own only a portion of the original site. At March 31, 2011, Consumers estimated its undiscounted remaining remediation and other response activity costs to be between $31 million and $45 million. Generally, Consumers has been able to recover most of its costs to date through proceeds from insurance settlements and customer rates.

At March 31, 2011, Consumers had a recorded liability of $31 million and a regulatory asset of $56 million that included $25 million of deferred MGP expenditures. The timing of payments related to the remediation and other response activity at Consumers’ former MGP sites is uncertain. Consumers expects its remediation and other response activity costs to average $6 million annually over the next five years. Consumers periodically reviews these cost estimates. Any significant change in the underlying assumptions, such as an increase in the number of sites, changes in remediation techniques, or legal and regulatory requirements, could affect Consumers’ estimates of annual response activity costs and the MGP liability.

Guarantees

Presented in the following table are CMS Energy’s guarantees at March 31, 2011:

						In Millions
	Issue	Expiration	Maximum				Carrying
Guarantee Description	Date	Date	Obligation				Amount
Indemnity obligations from asset sales and other agreements	Various	Various through	$	512	1		$	21
		June 2022
Guarantees and put options2	Various	Various through		36				1
		December 2011

1

The majority of this amount arises from stock and asset sales agreements under which CMS Energy or a subsidiary of CMS Energy, other than Consumers, indemnified the purchaser for losses resulting from various matters, including claims related to tax disputes, claims related to PPAs, and defects in title to the assets or stock sold to the purchaser by CMS Energy subsidiaries. Except for items described elsewhere in this Note, CMS Energy believes the likelihood of material loss to be remote for the indemnity obligations not recorded as liabilities.

2

At March 31, 2011, the carrying amount of CMS Land’s put option agreements with certain Bay Harbor property owners was $1 million. If CMS Land is required to purchase a Bay Harbor property under a put option agreement, it may sell the property to recover the amount paid under the put option agreement.

At March 31, 2011, the maximum obligation and carrying amounts for Consumers’ guarantees were less than $1 million.

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Presented in the following table is additional information regarding CMS Energy’s guarantees:

		Events That Would Require
Guarantee Description	How Guarantee Arose	Performance
Indemnity obligations from asset sales and other agreements	Stock and asset sales agreements	Findings of misrepresentation, breach of warranties, tax claims, and other specific events or circumstances
Guarantees and put options	Normal operating activity	Nonperformance or non-payment by a subsidiary under a related contract
	Bay Harbor remediation efforts	Owners exercising put options requiring CMS Land to purchase property

CMS Energy, Consumers, and certain other subsidiaries of CMS Energy also enter into various agreements containing tax and other indemnity provisions for which they are unable to estimate the maximum potential obligation. These factors include unspecified exposure under certain agreements. CMS Energy and Consumers consider the likelihood that they would be required to perform or incur substantial losses related to these indemnities to be remote.

Other Contingencies

In addition to the matters disclosed in this Note and Note 3, Regulatory Matters, there are certain other lawsuits and administrative proceedings before various courts and governmental agencies arising in the ordinary course of business to which CMS Energy, Consumers, and certain other subsidiaries of CMS Energy are parties. These other lawsuits and proceedings may involve personal injury, property damage, contracts, environmental matters, federal and state taxes, rates, licensing, employment, and other matters. Further, CMS Energy and Consumers occasionally self-report certain regulatory non-compliance matters that may or may not eventually result in administrative proceedings. CMS Energy and Consumers believe that the outcome of any one of these proceedings will not have a material adverse effect on their consolidated results of operations, financial condition, or liquidity.

3: REGULATORY MATTERS

Rate matters are critical to Consumers. Depending upon the specific issues, the outcomes of rate cases and proceedings could have a material adverse effect on CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations. Consumers cannot predict the outcome of these proceedings.

Consumers’ Electric Utility

Electric Rate Case: The MPSC, in its 2010 electric rate case order, authorized Consumers to increase its rates by $146 million annually, $4 million less than the rate increase self-implemented by Consumers in July 2010. In February 2011, Consumers filed an application to reconcile the total revenues collected under its self-implemented rates with those that would have been collected under the rates authorized by the MPSC. This reconciliation found that no refund to customers is required.

In its July 2010 order allowing Consumers to self-implement its rate increase, the MPSC expressed concern about utilities repeatedly self-implementing rate increases over short time periods, and before the return of previous overcollections of self-implemented rate increases. In August 2010, the Attorney General filed a claim for appeal with the Michigan Court of Appeals regarding the MPSC’s July 2010 order.

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Power Supply Cost Recovery: The PSCR process is designed to allow Consumers to recover all of its power supply costs if incurred under reasonable and prudent policies and practices. The MPSC reviews these costs, policies, and practices in annual plan and reconciliation proceedings. Consumers adjusts its PSCR billing factor monthly in order to minimize the overrecovery or underrecovery amount in the annual PSCR reconciliation.

PSCR Plan: In September 2010, Consumers submitted its 2011 PSCR plan to the MPSC. In accordance with its proposed plan, Consumers self-implemented the 2011 PSCR charge beginning in January 2011.

PSCR Reconciliations: Presented in the following table are the PSCR reconciliation filings pending with the MPSC:

			PSCR Cost of
PSCR Year	Date Filed	Net Underrecovery	Power Sold
2009	March 2010	$39 million1	$1.6 billion
2010	March 2011	$15 million	$1.7 billion

¹ In this reconciliation, intervenors are seeking disallowances ranging from $11 million to $42 million. In March 2011, the administrative law judge recommended that the MPSC allow Consumers to include its 2009 net underrecovery in the 2011 PSCR plan year, with the exception of $2 million of net replacement power costs associated with an outage at Consumers’ Whiting Plant.

Electric Revenue Decoupling Mechanism: In March 2011, Consumers filed its first reconciliation of the electric revenue decoupling mechanism with the MPSC, requesting recovery of $27 million from customers for the period December 2009 through November 2010. The decoupling mechanism was authorized by the MPSC in Consumers’ 2009 electric rate case order, subject to certain conditions, and extended in the 2010 electric rate case order. It allows Consumers to adjust future electric rates to compensate for changes in sales volumes resulting from weather fluctuations, energy efficiency, and conservation. Various parties have filed appeals concerning the electric decoupling mechanism. At March 31, 2011, Consumers had a $48 million non-current regulatory asset recorded for electric decoupling, which included the $27 million balance referred to above.

Uncollectible Expense Tracking Mechanism: In March 2011, Consumers filed its reconciliation of the uncollectible expense tracking mechanism with the MPSC, requesting recovery of $3 million from customers for November 2009 through November 2010, the entire period of the tracker. The uncollectible expense tracking mechanism, authorized by the MPSC in its November 2009 electric rate order, allowed future rates to be adjusted to collect or refund 80 percent of the difference between the level of electric uncollectible expense included in rates and actual uncollectible expense. During 2009, various parties filed appeals concerning the uncollectible expense tracking mechanism. In its November 2010 electric rate order, the MPSC terminated the uncollectible expense tracking mechanism as of November 2010.

Electric Operation and Maintenance Expenditures Show-Cause Order: In December 2005, the MPSC authorized Consumers to increase its electric rates. In the same order, the MPSC ordered Consumers to spend certain amounts on future tree-trimming and line-clearing activities, as well as on the operation and maintenance of Consumers’ fossil-fueled power plants. At that time, the MPSC also ordered Consumers to establish mechanisms to track these expenditures and stated that the rate increase was subject to refund with interest if the specified amounts were not spent on these activities.

In October 2009, the MPSC issued a show-cause order alleging that, in 2007, Consumers spent $14 million less on forestry and fossil-fueled plant operation and maintenance activity than the amount ordered by the MPSC and that Consumers had not refunded this amount to customers. The order directed Consumers to explain why it should not be found in violation of the MPSC’s December 2005 order and subjected to applicable sanctions, and why the refunds required by that order had not yet occurred.

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Consumers’ response indicated that the total amount it spent on forestry and fossil-fueled plant operation and maintenance activity for the years 2006 through 2009 exceeded the total amounts included in rates for these activities.

In March 2010, the MPSC Staff requested that the MPSC find Consumers in violation of the December 2005 order and that the MPSC order Consumers to refund $27 million for failure to meet annual spending requirements during 2007 and 2008. Consumers filed a response, stating that it would be unreasonable and unlawful to order a refund of this amount and that Consumers’ expenditures were consistent with the MPSC’s orders. In March 2010, the administrative law judge’s proposal for decision found Consumers’ expenditures to be prudent and that Consumers did not violate the December 2005 order. The administrative law judge recommended that the MPSC find that no violation of the December 2005 order occurred and that no refunds be made to customers.

Big Rock Decommissioning: The MPSC and FERC regulate the recovery of Consumers’ costs to decommission Big Rock. Subsequent to 2000, Consumers stopped funding a Big Rock trust fund because the collection period for an MPSC-authorized decommissioning surcharge expired. The level of funds provided by the trust fell short of the amount needed to complete decommissioning and Consumers provided $44 million of corporate contributions for decommissioning costs.

In an order issued in February 2010, the MPSC concluded that certain revenues collected during a statutory rate freeze from 2001 through 2003 should have been deposited in a decommissioning trust fund. The MPSC agreed that Consumers was entitled to recover $44 million of decommissioning costs, but concluded that Consumers had collected this amount previously through the rates in effect during the rate freeze. In April 2010, the MPSC ordered Consumers to refund $85 million of revenue collected in excess of decommissioning costs plus interest. Consumers completed this refund in January 2011. Consumers filed an appeal with the Michigan Court of Appeals in March 2010 to dispute the MPSC’s conclusion that the collections received during the rate freeze should be subject to refund.

Consumers paid $30 million to Entergy to assume ownership and responsibility for the Big Rock ISFSI, and incurred $55 million for nuclear fuel storage costs as a result of the DOE’s failure to accept spent nuclear fuel. Consumers is seeking recovery of these costs from the DOE. At March 31, 2011, Consumers had an $85 million regulatory asset recorded on its Consolidated Balance Sheets for these costs.

Renewable Energy Plan: In June 2010, Consumers filed with the MPSC its first annual report and reconciliation for its renewable energy plan, requesting approval of Consumers’ reconciliation of renewable energy plan costs for 2009.

In February 2011, Consumers filed an amended renewable energy plan, reducing the surcharge billed to customers by an annual amount of $55 million. Consumers proposed the amendment as a result of lower-than-anticipated costs to comply with the renewable energy requirements prescribed by the 2008 Energy Law.

Energy Optimization Plan: In April 2010, Consumers filed with the MPSC its first annual report and reconciliation for its energy optimization plan, requesting approval of Consumers’ reconciliation of energy optimization plan costs for 2009. Consumers also requested approval to collect $6 million from customers as an incentive payment for exceeding savings targets under both its gas and electric energy optimization plans during 2009. In March 2011, the administrative law judge recommended that the MPSC approve Consumers’ reconciliation as filed, with minor exceptions.

For exceeding its 2010 electric and gas savings targets, Consumers will request the MPSC’s approval to collect $8 million, the maximum incentive, in the energy optimization reconciliation to be filed in April 2011.

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Electric Depreciation: In February 2010, Consumers filed an electric depreciation case related to its wholly owned electric utility property. As ordered by the MPSC, Consumers prepared a traditional cost-of-removal study, which supported a $46 million increase in annual depreciation expense.

Also in February 2010, Consumers filed an electric depreciation case for Ludington, the pumped-storage plant jointly owned by Consumers and Detroit Edison. This case, filed jointly with Detroit Edison, requests an increase in annual depreciation expense. Consumers’ share of this increase is $9 million annually.

Consumers’ Gas Utility

Gas Rate Case: In August 2010, Consumers filed an application with the MPSC seeking an annual increase in revenue of $55 million based on an 11 percent authorized return on equity. The filing requested recovery for investments made to enhance safety, system reliability, and operational efficiencies that improve service to customers.

Consumers filed testimony and exhibits with the MPSC in January 2011, supporting a self-implemented annual gas rate increase of $48 million, subject to refund with interest. In February 2011, Consumers filed a letter with the MPSC revising the proposed self-implemented increase to $29 million. The MPSC issued an order in February 2011 delaying Consumers’ self-implementation in order to give other parties to the proceeding an opportunity to respond to Consumers’ revised self-implementation filing.

Parties have filed briefs supporting their positions. In April 2011, Consumers filed an initial brief supporting an annual gas rate increase of $45 million. Also in April 2011, the MPSC Staff submitted a revised proposed annual revenue increase of $16 million. The parties have engaged in discussions in an effort to settle the issues in this case. As of April 28, 2011, a settlement was not yet finalized, but Consumers believes settlement is likely.

Gas Cost Recovery: The GCR process is designed to allow Consumers to recover all of its purchased natural gas costs if incurred under reasonable and prudent policies and practices. The MPSC reviews these costs, policies, and practices in annual plan and reconciliation proceedings. Consumers adjusts its GCR billing factor monthly in order to minimize the overrecovery or underrecovery amount in the annual GCR reconciliation.

GCR Plan: In December 2010, Consumers submitted its 2011-2012 GCR plan to the MPSC. In accordance with its proposed plan, Consumers self-implemented the 2011-2012 GCR charge beginning in April 2011.

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GCR Reconciliation: Presented in the following table is the GCR reconciliation filing pending with the MPSC:

			GCR Cost of
GCR Year	Date Filed	Net Overrecovery	Gas Sold
2009-2010	June 2010	$1 million	$1.3 billion

4: FINANCINGS

Revolving Credit Facilities: The following secured revolving credit facilities with banks were available at March 31, 2011:

								In Millions
						Letters of Credit
Company	Expiration Date	Amount of Facility		Amount Borrowed		Outstanding		Amount Available
CMS Energy1	March 31, 2016	$	550	$	—	$	3	$	547
Consumers2,3	March 31, 2016		500		—		300		200
Consumers3	August 9, 2013		150		—		—		150
Consumers4	September 21, 2011		30		—		30		—

1	On March 31, 2011, CMS Energy entered into a $550 million secured revolving credit facility with a consortium of banks. This facility has a five-year term and replaces CMS Energy’s revolving credit facility that was set to expire in 2012. Obligations under this facility are secured by Consumers common stock.
2	On March 31, 2011, Consumers entered into a $500 million secured revolving credit facility with a consortium of banks. This facility has a five-year term and replaces Consumers’ revolving credit facility that was set to expire in 2012.
3	Obligations under this facility are secured by FMBs of Consumers.
4	Secured revolving letter of credit facility.

Short-term Borrowings: Under Consumers’ revolving accounts receivable sales program, Consumers may transfer up to $250 million of accounts receivable, subject to certain eligibility requirements. These transactions are accounted for as short-term secured borrowings. At March 31, 2011, $250 million of accounts receivable were eligible for transfer, and no accounts receivable had been transferred under the program. During the three months ended March 31, 2011, Consumers had no borrowings under this program.

Contingently Convertible Securities: Presented in the following table are the significant terms of CMS Energy’s contingently convertible securities at March 31, 2011:

			Outstanding		Adjusted Conversion		Adjusted Trigger
Security	Maturity		(In Millions)		Price		Price
2.875% senior notes		2024	$	288	$	12.95	$	15.53
5.50% senior notes		2029		172		14.26		18.54

During 20 of the last 30 trading days ended March 31, 2011, the adjusted trigger-price contingencies were met for both series of the contingently convertible senior notes, and as a result, the senior notes are convertible at the option of the note holders for the three months ending June 30, 2011.

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Presented in the following table are details about conversions of contingently convertible securities during the three months ended March 31, 2011:

3.375% contingently				Conversion Value				Cash Paid on
convertible senior		Principal Converted		per $1,000 of		Common Stock Issued		Settlement
notes due 2023	Conversion Date	(In Millions)		principal		on Settlement		(In Millions)
Voluntary conversion	January 2011	$	4	$	1,994.21		197,472	$	4

Dividend Restrictions: Under provisions of CMS Energy’s senior notes indenture, at March 31, 2011, payment of common stock dividends by CMS Energy was limited to $1.0 billion.

Under the provisions of its articles of incorporation, at March 31, 2011, Consumers had $453 million of unrestricted retained earnings available to pay common stock dividends to CMS Energy. Provisions of the Federal Power Act and the Natural Gas Act appear to restrict dividends payable by Consumers to the amount of Consumers’ retained earnings. Several decisions from FERC suggest that under a variety of circumstances common stock dividends from Consumers would not be limited to amounts in Consumers’ retained earnings. Any decision by Consumers to pay common stock dividends in excess of retained earnings would be based on specific facts and circumstances and would result only after a formal regulatory filing process.

For the three months ended March 31, 2011, CMS Energy received $104 million of common stock dividends from Consumers.

5: EARNINGS PER SHARE — CMS ENERGY

Presented in the following table are CMS Energy’s basic and diluted EPS computations based on Income from Continuing Operations:

	In Millions, Except Per Share Amounts
Three Months Ended March 31	2011		2010
Income Available to Common Stockholders
Income from Continuing Operations	$	133	$	89
Less Preferred Stock Dividends		—		3
Income from Continuing Operations Available to Common Stockholders — Basic and Diluted	$	133	$	86
Average Common Shares Outstanding
Weighted average shares — basic		250.0		228.0
Add dilutive contingently convertible securities		10.7		18.4
Add dilutive non-vested stock awards, options, and warrants		0.3		0.1
Add dilutive convertible debentures		0.7		—
Weighted average shares — diluted		261.7		246.5
Income from Continuing Operations per Average Common Share Available to Common Stockholders
Basic	$	0.53	$	0.38
Diluted	$	0.51	$	0.35

Contingently Convertible Securities

When CMS Energy has earnings from continuing operations, its contingently convertible securities dilute EPS to the extent that the conversion value of a security, which is based on the average market price of CMS Energy’s common stock, exceeds the principal value of that security.

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Stock Options and Warrants

For the three months ended March 31, 2011, outstanding options to purchase 0.3 million shares of CMS Energy common stock had no impact on diluted EPS, since the exercise price was greater than the average market price of CMS Energy common stock. These stock options have the potential to dilute EPS in the future.

Non-vested Stock Awards

CMS Energy’s non-vested stock awards are composed of participating and non-participating securities. The participating securities accrue cash dividends when common stockholders receive dividends. Since the recipient is not required to return the dividends to CMS Energy if the recipient forfeits the award, the non-vested stock awards are considered participating securities. As such, the participating non-vested stock awards were included in the computation of basic EPS. The non-participating securities accrue stock dividends that vest concurrently with the stock award. If the recipient forfeits the award, the stock dividends accrued on the non-participating securities are also forfeited. Accordingly, the non-participating awards and stock dividends were included in the computation of diluted EPS, but not basic EPS.

Convertible Debentures

For the three months ended March 31, 2010, there was no impact on diluted EPS from CMS Energy’s 7.75 percent convertible subordinated debentures. Using the if-converted method, the debentures would have:

• increased the numerator of diluted EPS by less than $1 million for the three months ended March 31, 2010, from an assumed reduction of interest expense, net of tax; and

• increased the denominator of diluted EPS by 0.7 million shares for the three months ended March 31, 2010.

CMS Energy can revoke the conversion rights if certain conditions are met.

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6: FINANCIAL INSTRUMENTS

The carrying amounts of CMS Energy’s and Consumers’ cash, cash equivalents, current accounts and notes receivable, short-term investments, and current liabilities approximate their fair values because of their short-term nature. Presented in the following table are the cost or carrying amounts and fair values of CMS Energy’s and Consumers’ long-term financial instruments:

							In Millions
	March 31, 2011				December 31, 2010
	Cost or Carrying				Cost or Carrying
	Amount		Fair Value		Amount		Fair Value
CMS Energy, including Consumers
Securities held to maturity	$	7	$	7	$	5	$	6
Securities available for sale		116		116		90		90
Notes receivable1		380		399		386		407
Long-term debt2		7,177		7,936		7,174		7,861
Consumers
Securities available for sale	$	83	$	107	$	64	$	90
Long-term debt3		4,516		4,895		4,525		4,891

1	Includes current portion of notes receivable of $13 million at March 31, 2011 and $11 million at December 31, 2010.
2	Includes current portion of long-term debt of $1,251 million at March 31, 2011 and $726 million at December 31, 2010.
3	Includes current portion of long-term debt of $337 million at March 31, 2011 and $37 million at December 31, 2010.

Notes receivable consist of EnerBank’s fixed-rate installment loans. EnerBank estimates the fair value of these loans using a discounted cash flows technique that incorporates market interest rates as well as assumptions about the remaining life of the loans and credit risk. Fair values for impaired loans are estimated using discounted cash flows or underlying collateral values.

CMS Energy and Consumers estimate the fair value of their long-term debt using quoted prices from market trades of the debt, if available. In the absence of quoted prices, CMS Energy and Consumers calculate market yields and prices for the debt using a matrix method that incorporates market data for similarly rated debt. Depending on the information available, other valuation techniques may be used that rely on internal assumptions and models. CMS Energy includes the value of the conversion features in estimating the fair value of its convertible debt, and incorporates, as appropriate, information on the market prices of CMS Energy’s common stock.

The effects of third-party credit enhancements are excluded from the fair value measurements of long-term debt. At March 31, 2011 and December 31, 2010, CMS Energy’s long-term debt included $103 million principal amount that was supported by third-party credit enhancements. This entire principal amount was at Consumers.

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Presented in the following table are CMS Energy’s and Consumers’ investment securities:

															In Millions
			March 31, 2011								December 31, 2010
	Cost		Unrealized Gains		Unrealized Losses		Fair Value		Cost		Unrealized Gains		Unrealized Losses		Fair Value
CMS Energy, including Consumers
Available for sale:
SERP:
Mutual fund	$	89	$	—	$	—	$	89	$	62	$	—	$	—	$	62
State and municipal bonds		27		—		—		27		28		—		—		28
Held to maturity:
Debt securities		7		—		—		7		5		1		—		6
Consumers
Available for sale:
SERP:
Mutual fund	$	58	$	—	$	—	$	58	$	39	$	—	$	—	$	39
State and municipal bonds		18		—		—		18		17		—		—		17
CMS Energy common stock		7		24		—		31		8		26		—		34

The mutual fund classified as available for sale is a short-term, fixed-income fund. During the three months ended March 31, 2011, CMS Energy contributed $27 million to the SERP, which included a contribution of $20 million by Consumers. The contributions were used to acquire additional shares in the mutual fund. State and municipal bonds classified as available for sale consist of investment grade state and municipal bonds. Debt securities classified as held to maturity consist primarily of mortgage-backed securities held by EnerBank, as well as state and municipal bonds held by EnerBank.

During each of the three-month periods ended March 31, 2011 and 2010, the proceeds from CMS Energy’s sales of investment securities were $1 million, which included proceeds from Consumers’ sales of investment securities of less than $1 million. All of the proceeds were related to sales of state and municipal bonds that were held within the SERP and classified as available for sale. Gross realized losses on these sales were less than $1 million for CMS Energy and Consumers during each period.

Presented in the following table are the fair values of the SERP state and municipal bonds by contractual maturity at March 31, 2011:

			In Millions
	CMS Energy,
	including Consumers		Consumers
Due one year or less	$	1	$	1
Due after one year through five years		11		7
Due after five years through ten years		9		6
Due after ten years		6		4
Total	$	27	$	18

7: DERIVATIVE INSTRUMENTS

In order to limit exposure to certain market risks, primarily changes in commodity prices, interest rates, and foreign exchange rates, CMS Energy and Consumers may enter into various risk management contracts, such as forward contracts, futures, options, and swaps. In entering into these contracts, they follow established policies and procedures under the direction of an executive oversight committee

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consisting of senior management representatives and a risk committee consisting of business unit managers. Neither CMS Energy nor Consumers enters into any derivatives for trading purposes.

The contracts used to manage market risks may qualify as derivative instruments. If a contract is a derivative and does not qualify for the normal purchases and sales exception, the contract is recorded on the balance sheet at its fair value. Each reporting period, the resulting asset or liability is adjusted to reflect any change in the fair value of the contract. Since none of CMS Energy’s or Consumers’ derivatives has been designated as an accounting hedge, all changes in fair value are reported in earnings. For a discussion of how CMS Energy and Consumers determine the fair value of their derivatives, see Note 1, Fair Value Measurements.

Commodity Price Risk: In order to support ongoing operations, CMS Energy and Consumers enter into contracts for the future purchase and sale of various commodities, such as electricity, natural gas, and coal. These forward contracts are generally long-term in nature and result in physical delivery of the commodity at a contracted price. Most of these contracts are not subject to derivative accounting because:

• they do not have a notional amount (that is, a number of units specified in a derivative instrument, such as MWh of electricity or bcf of natural gas);

• they qualify for the normal purchases and sales exception; or

• there is not an active market for the commodity.

CMS Energy’s and Consumers’ coal purchase contracts are not derivatives because there is not an active market for the coal they purchase. If an active market for coal develops in the future, some of these contracts may qualify as derivatives. For Consumers, which is subject to regulatory accounting, the resulting fair value gains and losses would be offset by changes in regulatory assets and liabilities and would not affect net income. No other subsidiaries of CMS Energy enter into coal purchase contracts.

CMS ERM has not designated its contracts to purchase and sell electricity and natural gas as normal purchases and sales and, therefore, CMS Energy accounts for those contracts as derivatives. To manage commodity price risks associated with these forward purchase and sale contracts, CMS ERM uses various financial instruments, such as futures, options, and swaps. At March 31, 2011, CMS ERM held the following derivative contracts:

• a forward contract for the physical sale of 642 GWh of electricity through 2015 on behalf of one of CMS Energy’s non-utility generating plants;

• futures contracts through 2011 as an economic hedge of 24 percent of the generating plant’s natural gas requirements needed to serve a steam sales contract, for a total of 0.2 bcf of natural gas;

• forward contracts to purchase 3.1 bcf and sell 6.7 bcf of natural gas through 2011 in CMS ERM’s role as a marketer of natural gas for third-party producers; and

• an option to sell 458 GWh of electricity, and as an economic hedge, contracts to purchase 0.6 bcf of natural gas through 2011.

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Presented in the following table are the fair values of CMS Energy’s and Consumers’ derivative instruments:

									In Millions
	Derivative Assets					Derivative Liabilities
	Balance	Fair Value at				Balance	Fair Value at
	Sheet	March 31,		December 31,		Sheet	March 31,			December 31,
	Location	2011		2010		Location	2011			2010
CMS Energy, including Consumers
Derivatives not designated as hedging instruments:
Commodity contracts1	Other assets	$	1	$	1	Other liabilities2	$	3		$	4
Consumers
Derivatives not designated as hedging instruments:
Commodity contracts	Other assets	$	—	$	1	Other liabilities	$	—		$	—

1	Assets and liabilities are presented gross and exclude the impact of offsetting derivative assets and liabilities under master netting agreements, which was less than $1 million at March 31, 2011 and December 31, 2010.
2	Liabilities exclude the impact of offsetting cash margin deposits paid by CMS ERM to other parties, which was less than $1 million at March 31, 2011 and December 31, 2010. CMS Energy presents these liabilities net of these impacts on its Consolidated Balance Sheets.

Presented in the following table is the effect of CMS Energy’s and Consumers’ derivative instruments on their Consolidated Statements of Income:

				In Millions
	Location of Gain	Amount of Gain
	on Derivatives	on Derivatives
	Recognized in Income	Recognized in Income
Three Months Ended March 31		2011			2010
CMS Energy, including Consumers
Derivatives not designated as hedging instruments:
Commodity contracts	Operating Revenue	$	1		$	5
	Fuel for electric generation		—			2
	Purchased and interchange power		—			1
	Other income		1			—
Total CMS Energy		$	2		$	8
Consumers
Derivatives not designated as hedging instruments:
Commodity contracts	Other income	$	1		$	—

CMS Energy’s derivative liabilities subject to credit-risk-related contingent features were $1 million at March 31, 2011 and December 31, 2010.

Credit Risk: CMS Energy’s swaps, options, and forward contracts contain credit risk, which is the risk that a counterparty will fail to meet its contractual obligations. CMS Energy reduces this risk through established policies and procedures. CMS Energy assesses credit quality by considering credit ratings, financial condition, and other available information for counterparties. A credit limit is established for each counterparty based on the evaluation of its credit quality. Exposure to potential loss under each contract is monitored and action is taken when appropriate.

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CMS ERM enters into contracts primarily with companies in the electric and gas industry. This industry concentration may have a positive or negative impact on CMS Energy’s exposure to credit risk based on how similar changes in economic conditions, the weather, or other conditions affect these counterparties. CMS ERM reduces its credit risk exposure by using industry-standard agreements that allow for netting positive and negative exposures associated with the same counterparty. Typically, these agreements also allow each party to demand adequate assurance of future performance from the other party, when there is reason to do so.

At March 31, 2011, if counterparties within this industry concentration all failed to meet their contractual obligations, the loss to CMS Energy on contracts accounted for as derivatives would be less than $1 million.

CMS Energy does not expect a material adverse effect on its Consolidated Balance Sheets and Consolidated Statements of Income as a result of counterparty nonperformance, given CMS Energy’s credit policies, current exposures, and credit reserves.

8: NOTES RECEIVABLE

EnerBank provides unsecured consumer installment loans for financing home improvements. These loans totaled $380 million, net of an allowance for loan losses of $5 million, at March 31, 2011, and $385 million, net of an allowance for loan losses of $5 million, at December 31, 2010. At March 31, 2011, $13 million of EnerBank’s loans were classified as current Notes receivable and $367 million were classified as non-current Notes receivable on CMS Energy’s Consolidated Balance Sheets. At December 31, 2010, $10 million of EnerBank’s loans were classified as current Notes receivable and $375 million were classified as non-current Notes receivable on CMS Energy’s Consolidated Balance Sheets.

The allowance for loan losses is a valuation allowance to reflect estimated credit losses. The allowance is increased by the provision for loan losses and decreased by loan charge-offs net of recoveries. Management estimates the allowance balance required by taking into consideration historical loan loss experience, the nature and volume of the portfolio, economic conditions, and other factors. Loans losses are charged against the allowance when the loss is confirmed, but no later than the point at which a loan becomes 120 days past due.

Presented in the following table are the changes in the allowance for loan losses:

In Millions

Three Months Ended March 31	2011
Allowance for loan losses, at beginning of period	$	5
Charge-offs		(1	)
Recoveries		—
Provision for loan losses		1
Allowance for loan losses, at end of period	$	5

Loans that are 30 days or more past due are considered delinquent. Presented in the following table is the delinquency status of EnerBank’s consumer loans at March 31, 2011:

In Millions

Past Due	Past Due	Past Due	Total		Total
30-59 Days	60-89 Days	Over 90 Days	Delinquent	Current	Outstanding
$1	$1	$—	$2	$378	$380

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9: RETIREMENT BENEFITS

CMS Energy and Consumers provide pension, OPEB, and other retirement benefits to employees.

Presented in the following tables are the costs and other changes in plan assets and benefit obligations incurred in CMS Energy’s and Consumers’ retirement benefits plans:

In Millions

	Pension
Three Months Ended March 31	2011			2010
CMS Energy, including Consumers
Net periodic pension cost
Service cost	$	12		$	11
Interest expense		25			24
Expected return on plan assets		(28	)		(23	)
Amortization of:
Net loss		16			13
Prior service cost		1			2
Net periodic pension cost	$	26		$	27
Regulatory adjustment1		—			2
Net periodic pension cost after regulatory adjustment	$	26		$	29
Consumers
Net periodic pension cost
Service cost	$	12		$	11
Interest expense		24			24
Expected return on plan assets		(27	)		(23	)
Amortization of:
Net loss		15			12
Prior service cost		1			2
Net periodic pension cost	$	25		$	26
Regulatory adjustment1		—			2
Net periodic pension cost after regulatory adjustment	$	25		$	28

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In Millions

	OPEB
Three Months Ended March 31	2011			2010
CMS Energy, including Consumers
Net periodic OPEB cost
Service cost	$	7		$	7
Interest expense		19			21
Expected return on plan assets		(17	)		(15	)
Amortization of:
Net loss		8			8
Prior service credit		(5	)		(2	)
Net periodic OPEB cost	$	12		$	19
Regulatory adjustment1		—			1
Net periodic OPEB cost after regulatory adjustment	$	12		$	20
Consumers
Net periodic OPEB cost
Service cost	$	6		$	7
Interest expense		18			20
Expected return on plan assets		(15	)		(14	)
Amortization of:
Net loss		8			8
Prior service credit		(5	)		(2	)
Net periodic OPEB cost	$	12		$	19
Regulatory adjustment1		—			1
Net periodic OPEB cost after regulatory adjustment	$	12		$	20

¹ Regulatory adjustments are the differences between amounts included in rates and the periodic benefit cost calculated. These regulatory adjustments were offset by surcharge revenues, which resulted in no impact to net income for the periods presented.

CMS Energy’s and Consumers’ expected long-term rate of return on Pension Plan assets is eight percent. For the twelve months ended March 31, 2011, the actual return on Pension Plan assets was 13.1 percent, and for the twelve months ended March 31, 2010 the actual return was 31.6 percent. The expected rate of return is an assumption about long-term asset performance that CMS Energy and Consumers review annually for reasonableness and appropriateness.

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10: INCOME TAXES

Presented in the following table is the difference between the effective income tax rate from continuing operations, excluding noncontrolling interests, and the statutory U.S. federal income tax rate:

In Millions

Three Months Ended March 31	2011			2010
CMS Energy, including Consumers
U.S. federal income tax rate		35.0	%		35.0	%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal benefit		3.4			5.0
Medicare Part D exempt income, net of law change		(1.2	)		1.0
Income tax credit amortization		(0.6	)		(0.7	)
Other, net		0.1			0.4
Effective income tax rate		36.7	%		40.7	%
Consumers
U.S. federal income tax rate		35.0	%		35.0	%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal benefit		3.5			3.8
Medicare Part D exempt income, net of law change		(0.9	)		(1.1	)
Plant basis differences		(0.2	)		(0.6	)
Income tax credit amortization		(0.4	)		(0.4	)
Other, net		0.2			—
Effective income tax rate		37.2	%		36.7	%

For the three months ended March 31, 2010, CMS Energy recognized deferred tax expense of $3 million to reflect the enactment of the Health Care Acts. The law change prospectively repealed the tax deduction for the portion of the health care costs reimbursed by the Medicare Part D subsidy for taxable years beginning after December 31, 2012.

11: REPORTABLE SEGMENTS

Reportable segments consist of business units defined by the products and services they offer. CMS Energy and Consumers evaluate the performance of each segment based on its contribution to net income available to CMS Energy’s common stockholders. The reportable segments for CMS Energy and Consumers are:

CMS Energy:

• electric utility, consisting of regulated activities associated with the generation and distribution of electricity in Michigan;

• gas utility, consisting of regulated activities associated with the transportation, storage, and distribution of natural gas in Michigan;

• enterprises, consisting of various subsidiaries engaging primarily in domestic IPP; and

• other, including EnerBank, corporate interest and other expenses, and discontinued operations.

Consumers:

• electric utility, consisting of regulated activities associated with the generation and distribution of electricity in Michigan;

• gas utility, consisting of regulated activities associated with the transportation, storage, and distribution of natural gas in Michigan; and

• other, including a consolidated special-purpose entity for the sale of accounts receivable.

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Presented in the following tables is financial information by reportable segment:

In Millions

Three Months Ended March 31	2011			2010
Operating Revenue
CMS Energy, including Consumers
Electric utility	$	897		$	838
Gas utility		1,091			1,052
Enterprises		55			68
Other		12			9
Total Operating Revenue — CMS Energy	$	2,055		$	1,967
Consumers
Electric utility	$	897		$	838
Gas utility		1,091			1,052
Total Operating Revenue — Consumers	$	1,988		$	1,890
Net Income Available to Common Stockholders
CMS Energy, including Consumers
Electric utility	$	65		$	41
Gas utility		88			66
Enterprises		3			9
Discontinued operations		2			(1	)
Other		(23	)		(30	)
Total Net Income Available to Common Stockholders — CMS Energy	$	135		$	85
Consumers
Electric utility	$	65		$	41
Gas utility		88			66
Total Net Income Available to Common Stockholder — Consumers	$	153		$	107

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In Millions

	March 31, 2011		December 31, 2010
Plant, Property, and Equipment, Gross
CMS Energy, including Consumers
Electric utility1	$	10,021	$	9,944
Gas utility1		4,079		4,063
Enterprises		106		102
Other		36		36
Total Plant, Property, and Equipment, Gross — CMS Energy	$	14,242	$	14,145
Consumers
Electric utility1	$	10,021	$	9,944
Gas utility1		4,079		4,063
Other		15		15
Total Plant, Property, and Equipment, Gross — Consumers	$	14,115	$	14,022
Assets
CMS Energy, including Consumers
Electric utility1	$	9,747	$	9,321
Gas utility1		4,308		4,614
Enterprises		176		191
Other		1,411		1,490
Total Assets — CMS Energy	$	15,642	$	15,616
Consumers
Electric utility1	$	9,747	$	9,321
Gas utility1		4,308		4,614
Other		902		904
Total Assets — Consumers	$	14,957	$	14,839

¹ Amounts include a portion of Consumers’ other common assets attributable to both the electric and the gas utility businesses.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

CMS ENERGY

There have been no material changes to market risk as previously disclosed in Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk, in the 2010 Form 10-K.

CONSUMERS

There have been no material changes to market risk as previously disclosed in Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk, in the 2010 Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

CMS ENERGY

Disclosure Controls and Procedures: CMS Energy’s management, with the participation of its CEO and CFO, has evaluated the effectiveness of its disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, CMS Energy’s CEO and CFO have concluded that, as of the end of such period, its disclosure controls and procedures are effective.

Internal Control Over Financial Reporting: There have not been any changes in CMS Energy’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

CONSUMERS

Disclosure Controls and Procedures: Consumers’ management, with the participation of its CEO and CFO, has evaluated the effectiveness of its disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, Consumers’ CEO and CFO have concluded that, as of the end of such period, its disclosure controls and procedures are effective.

Internal Control Over Financial Reporting: There have not been any changes in Consumers’ internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

CMS Energy and Consumers are parties to various lawsuits and regulatory matters in the ordinary course of business. For information regarding material legal proceedings, including updates to information reported under Item 3 of Part I of the 2010 Form 10-K, see Part I, Item 1, Note 2, Contingencies and Commitments, and Note 3, Regulatory Matters.

ITEM 1A. RISK FACTORS

There have been no material changes to the Risk Factors as previously disclosed in Part I, Item 1A. Risk Factors, in the 2010 Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) Unregistered Sales of Equity Securities

On January 6, 2011, CMS Energy issued 197,472 shares of its common stock and paid $4 million in cash in exchange for $4 million aggregate principal amount of its 3.375 percent Convertible Senior Notes Due 2023, Series B. These convertible notes were tendered for conversion on December 17, 2010 in accordance with the terms and provisions of the Indenture of CMS Energy dated as of September 15, 1992, as supplemented by the Sixteenth Supplemental Indenture dated as of December 16, 2004. Such shares of common stock were issued based on the conversion value of $1,994.21 per $1,000 principal amount of convertible note. The issuance of these shares of common stock was an exchange of securities with existing shareholders and was exempt from registration pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended.

(c) Issuer Repurchases of Equity Securities

Presented in the following table are CMS Energy’s repurchases of equity securities for the three months ended March 31, 2011:

					Total Number of		Maximum Number of
					Shares Purchased as		Shares that May Yet Be
	Total Number		Average		Part of Publicly		Purchased Under
	of Shares		Price Paid		Announced Plans or		Publicly Announced
Period	Purchased1		per Share		Programs		Plans or Programs
January 1 — 31, 2011		—	$	—		—		—
February 1 — 28, 2011		—		—		—		—
March 1 — 31, 2011		355		19.12		—		—
Total		355	$	19.12		—		—

¹ Common shares were purchased to satisfy CMS Energy’s minimum statutory income tax withholding obligation for common shares that have vested under the performance incentive stock plan. Shares repurchased have a value based on the market price on the vesting date.

74

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. REMOVED AND RESERVED

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

The agreements included as exhibits to this Form 10-Q filing are included solely to provide information regarding the terms of the agreements and are not intended to provide any other factual or disclosure information about CMS Energy, Consumers, or other parties to the agreements. The agreements may contain representations and warranties made by each of the parties to each of the agreements that were made exclusively for the benefit of the parties involved in each of the agreements and should not be treated as statements of fact. The representations and warranties were made as a way to allocate risk if one or more of those statements prove to be incorrect. The statements were qualified by disclosures to the parties to each of the agreements and may not be reflected in each of the agreements. The agreements may apply standards of materiality that are different than standards applied to other investors. Additionally, the statements were made as of the date of the agreements or as specified in the agreements and have not been updated.

The representations and warranties may not describe the actual state of affairs of the parties to each agreement. Additional information about CMS Energy and Consumers may be found in this filing, at www.cmsenergy.com, at www.consumersenergy.com, and through the SEC’s website at www.sec.gov.

Exhibits		Description
4.1	—	One Hundred Fourteenth Supplemental Indenture dated as of March 31, 2011 between Consumers Energy Company and The Bank of New York Mellon, Trustee. (Exhibit 4.1 to Form 8-K filed April 6, 2011 and incorporated herein by reference)
10.1	—	$550 million Revolving Credit Agreement dated as of March 31, 2011 between CMS Energy Corporation, the Banks, as defined therein, and Barclays Bank PLC, as Agent. (Exhibit 10.1 to Form 8-K filed April 6, 2011 and incorporated herein by reference)
10.2	—	$500 million Revolving Credit Agreement dated as of March 31, 2011 among Consumers Energy Company, the Banks, as defined therein, and JPMorgan Chase Bank, N.A., as Agent. (Exhibit 10.2 to Form 8-K filed April 6, 2011 and incorporated herein by reference)
10.3	—	Pledge and Security Agreement dated as of March 31, 2011, made by CMS Energy Corporation to Barclays Bank PLC, as Administrative Agent for the Banks, as defined therein. (Exhibit 10.3 to Form 8-K filed April 6, 2011 and incorporated herein by reference)
10.4	—	CMS Incentive Compensation Plan for CMS Energy and its Subsidiaries, amended and restated effective as of January 1, 2011
10.5	—	Defined Contribution Supplemental Executive Retirement Plan effective April 1, 2006 and as amended effective April 1, 2011
10.6	—	Supplemental Executive Retirement Plan for Employees of CMS Energy/Consumers Energy Company effective on January 1, 1982 and as amended effective April 1, 2011
12.1	—	Statement regarding computation of CMS Energy’s Ratios of Earnings to Fixed Charges and Combined Fixed Charges and Preferred Dividends
12.2	—	Statement regarding computation of Consumers’ Ratios of Earnings to Fixed Charges and Combined Fixed Charges and Preferred Dividends
31.1	—	CMS Energy’s certification of the CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	—	CMS Energy’s certification of the CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.3	—	Consumers’ certification of the CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.4	—	Consumers’ certification of the CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	—	CMS Energy’s certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	—	Consumers’ certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS1	—	XBRL Instance Document
101.SCH1	—	XBRL Taxonomy Extension Schema
101.CAL1	—	XBRL Taxonomy Extension Calculation Linkbase
101.DEF1	—	XBRL Taxonomy Extension Definition Linkbase

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Exhibits		Description
101.LAB1	—	XBRL Taxonomy Extension Labels Linkbase
101.PRE1	—	XBRL Taxonomy Extension Presentation Linkbase

¹ In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 shall be deemed to be “furnished” and not “filed.” The financial information contained in the XBRL-related information is “unaudited” and “unreviewed.”

77

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78

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature for each undersigned company shall be deemed to relate only to matters having reference to such company or its subsidiary.

	CMS ENERGY CORPORATION                (Registrant)
Dated: April 28, 2011	By:	/s/ Thomas J. Webb
		Thomas J. Webb
		Executive Vice President and Chief Financial Officer

	CONSUMERS ENERGY COMPANY                      (Registrant)
Dated: April 28, 2011	By:	/s/ Thomas J. Webb
		Thomas J. Webb
		Executive Vice President and Chief Financial Officer

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CMS ENERGY’S AND CONSUMERS’ EXHIBIT INDEX

Exhibits		Description
10.4	—	CMS Incentive Compensation Plan for CMS Energy and its Subsidiaries, amended and restated effective as of January 1, 2011
10.5	—	Defined Contribution Supplemental Executive Retirement Plan effective April 1, 2006 and as amended effective April 1, 2011
10.6	—	Supplemental Executive Retirement Plan for Employees of CMS Energy/Consumers Energy Company effective on January 1, 1982 and as amended effective April 1, 2011
12.1	—	Statement regarding computation of CMS Energy’s Ratios of Earnings to Fixed Charges and Combined Fixed Charges and Preferred Dividends
12.2	—	Statement regarding computation of Consumers’ Ratios of Earnings to Fixed Charges and Combined Fixed Charges and Preferred Dividends
31.1	—	CMS Energy’s certification of the CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	—	CMS Energy’s certification of the CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.3	—	Consumers’ certification of the CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.4	—	Consumers’ certification of the CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	—	CMS Energy’s certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	—	Consumers’ certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS1	—	XBRL Instance Document
101.SCH1	—	XBRL Taxonomy Extension Schema
101.CAL1	—	XBRL Taxonomy Extension Calculation Linkbase
101.DEF1	—	XBRL Taxonomy Extension Definition Linkbase
101.LAB1	—	XBRL Taxonomy Extension Labels Linkbase
101.PRE1	—	XBRL Taxonomy Extension Presentation Linkbase

¹ In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 shall be deemed to be “furnished” and not “filed.” The financial information contained in the XBRL-related information is “unaudited” and “unreviewed.”

EX-10.4

Exhibit 10.4

CMS INCENTIVE COMPENSATION PLAN
FOR CMS ENERGY
AND ITS SUBSIDIARIES

CMS INCENTIVE COMPENSATION PLAN FOR CMS ENERGY
AND ITS SUBSIDIARIES

I. GENERAL PROVISIONS

1.1 Purpose. The purpose of the CMS Incentive Compensation Plan (“CMSICP Plan” or “Plan”) is to:

(a) Provide an equitable and competitive level of compensation that will permit CMS Energy (“Company”) and its subsidiaries to attract, retain and motivate officers and employees.

(b) No payments to Officers or Employees in the form of incentive compensation shall be made unless pursuant to a plan approved by the Committee on Compensation and Human Resources of the Board of Directors of CMS Energy and after express approval of the Committee. This plan shall be administered by the President and CEO of CMS Energy and the Benefit Administration Committee.

1.2 Effective Date. The initial effective date of the Plan is January 1, 2004. The Plan, as described herein, is amended and restated effective as of January 1, 2011.

1.3 Definitions. As used in this CMSICP Plan, the following terms have the meaning described below:

(a) “Annual Award” means an annual incentive award granted under the CMSICP Plan.

(b) “Base Salary” means the base salary on January 1 of a Performance Year, except as impacted by a Change in Status as defined in Article V. For purposes of the Plan, an Officer’s Base Salary must be subject to annual review and annual approval by the Committee.

(c) “CMS Energy” means CMS Energy Corporation.

(d) “Code” means the Internal Revenue Code of 1986, as amended.

(e) “Code Section 162(m) Employee” means an employee whose compensation is subject to the “Million Dollar Cap” under Code Section 162(m). Generally, this is the CEO and the three highest paid executive officers of the Company (other than the CEO and the CFO).

(f) “Committee” means the Committee on Compensation and Human Resources of the Board of Directors of CMS Energy Corporation.

(g) “Company” means CMS Energy.

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(h) “Deferred Annual Award” means the amount deferred pursuant to Section 4.2.

(i) “Disability” means that a participant has terminated employment with the Company or a Subsidiary and is disabled, as that term is defined under Code Section 409A and any applicable regulations.

(j) “Leave of Absence” for purposes of this CMSICP Plan means a leave of absence that has been approved by the Company.

(k) “Officer” means an employee of the Company or a Subsidiary in Salary Grade “E-3” or higher.

(l) “Payment Event” means the time at which a Deferred Annual Award may be paid pursuant to Section 4.2.

(m) “Payment Term” means the length of time for payment of a Deferred Annual Award under Section 4.2.

(n) “Pension Plan” means the Pension Plan for Employees of Consumers Energy and Other CMS Energy Companies.

(o) “Performance Year” means the calendar year prior to the year in which an Annual Award is made by the Committee.

(p) “Plan Administrator” for Officer participants means the President and Chief Executive Officer of CMS Energy, under the general direction of the Committee. For all other participants and for purposes of administering Deferred Amounts under Section 4.2, the Plan Administrator is the Benefits Administration Committee appointed by the Chief Executive Officer and the Chief Financial Officer as authorized by the Board of Directors.

(q) “Retirement” means that a Plan participant is no longer an active employee and qualifies for a retirement benefit other than a deferred vested retirement benefit under the Pension Plan. For a participant ineligible for coverage under the Pension Plan and covered instead under the Defined Company Contribution Plan, retirement occurs when there is a Separation from Service on or after age 55 with 5 or more years of service.

(r) “Separation from Service” means an Employee retires or otherwise has a separation from service from the Company as defined under Code Section 409A and any applicable regulations. The Plan Administrator will determine, consistent with the requirements of Code Section 409A and any applicable regulations, to what extent a person on a leave of absence,

2

including on paid sick leave pursuant to Company policy, has incurred a Separation from Service. Notwithstanding the above, a Separation from Service will occur consistent with the Regulation 1.409A-1(h) when it is reasonably anticipated that the level of service provided by the Employee will be no more than 45% of the average level of bona fide service performed by the Employee over the immediately preceding 36 month period.

(s) “Subsidiary” means any direct or indirect subsidiary of the Company.

1.4 Eligibility. Officers of CMS Energy and/or Consumers Energy and U.S. Employees who do not participate in a broad based incentive plan contingent upon objectives and performance unique to the employees’ subsidiary, affiliate, site and/or business unit, are eligible for participation in the CMSICP Plan (“Employee”). An individual listed on the Company payroll records as a contract employee is not eligible for this Plan.

1.5 Administration of the Plan.

(a) The Plan is administered by the President and Chief Executive Officer of CMS Energy under the general direction of the Committee.

(b) The Committee will normally approve performance goals in January of the Performance Year, but no later than March 30^th of the Performance Year.

(c) The Committee, no later than March 1st of the calendar year following the Performance Year, will review for approval proposed Annual Awards for the total of all CMSICP Officer participants, as recommended by the President and CEO of CMS Energy. All proposed Annual Awards are subject to approval of the Committee. Before the payment of any Annual Awards, the Company’s outside auditors and the Committee will certify in writing that the performance goals were in fact satisfied in accordance with Code Section 162(m).

(d) The Committee reserves the right to modify the performance goals with respect to unforeseeable circumstances or otherwise exercise discretion with respect to proposed Annual Awards as it deems necessary to maintain the spirit and intent of the CMSICP Plan, provided that such discretion will be to decrease or eliminate, not increase, Annual Awards in the case of any Code Section 162(m) Employees. The Committee also reserves the right in its discretion to not pay Annual Awards for a Performance Year. All decisions of the Committee are final.

3

II. CORPORATE PERFORMANCE GOALS

2.1 In General. Corporate performance goals are established in two areas: (1) the adjusted net income per outstanding CMS Energy share (EPS); and (2) the Cash Flow of CMS Energy (CF).

2.2 Plan Performance Factor. The plan performance factor used to calculate an Annual Award is based on the results of the corporate performance goals and is capped at two times the standard award amount. The Plan Performance Factor is established in a table relating specific performance results in the areas of EPS and CF to specific performance goals. This table shall be created by the Committee for each Performance Year.

III. ANNUAL AWARD FORMULA

3.1 Officers’ Annual Awards. Annual Awards for each eligible Officer will be based upon a percentage of the Officer’s Base Salary for the Performance Year times the Plan performance factor for the year as determined under 2.2 above. The standard award percentages are set forth in the table below. The maximum amount that can be awarded under this Plan for any Code Section 162(m) Employee will not exceed $2.5 Million in any one Performance Year. The total amount of an CMSICP participant Officer’s Annual Award shall be computed according to the annual award formula set forth in Section 3.2.

	Salary	Percentage
Position	Grade	of Base Salary
President & CEO	E-9	100%
President, Consumers Energy	E-8	65%
Executive Vice President	E-7	60%
Senior Vice President	E-6	60%
Senior Vice President	E-5	55%
Vice President	E-4	45%
Vice President	E-3	40%

3.2 Calculation of Award. Annual Awards for Officer, CMSICP participants will be calculated and made as follows:

Annual Award = Base Salary times
Standard Award Percentage times Plan Performance Factor

In addition, each Annual Award for Officers of Consumers Energy Company may be modified based on the results achieved for the Consumers Energy Annual Employee Incentive Compensation Plan. If the Consumers Energy Annual Employee Incentive Compensation Plan does not pay out an award for the same Performance Year, then the Annual Award, if any, earned under this Plan will be

4

reduced by 10%. If the Consumers Energy Annual Employee Incentive Compensation Plan pays out an award for the same Performance Year based on achievement of some, but not all, of the established objectives, then there is no modification of awards under this Plan. If however, the Consumers Energy Annual Employee Incentive Compensation Plan pays out an award for the same Performance Year based on achievement of 100% of the established objectives, then the Annual Award, if any, earned under this Plan will be increased by up to 10%, provided, however, that no such increase will cause the Annual Award to exceed the maximum of two times the standard award amount.

3.3 Employees’ Annual Awards. Annual Awards for eligible Employee, CMSICP participants will be based upon a standard award as set forth in the table below. The total amount of an Employee Annual Award shall be computed according to the annual award formula set forth in Section 3.4.

Salary	Standard Award Amount
Grade	Full time	Part time
25	$37,000
24	$36,500
23	$22,500
22	$22,000
21	$13,500
20	$13,000
19	$12,500
18	$  2,000	$1,000
17	$  1,750	$   875
16	$  1,500	$   750
15	$  1,350	$   675
14	$  1,200	$   600
13	$  1,150	$   575
12	$  1,100	$   550
11	$  1,050	$   525
10	$  1,000	$   500
9	$     950	$   475
8	$     900	$   450
7	$     850	$   425
6	$     800	$   400
5	$     750	$   375
4	$     700	$   350
3	$     650	$   325
2	$     600	$   300
1	$     550	$   275

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3.4 Calculation of Award. Annual Awards for CMSICP participants will be calculated and made as follows:

Annual Award = Standard Award Amount times Plan Performance Factor

IV. PAYMENT OF ANNUAL AWARDS

4.1 Cash Annual Award. All Annual Awards for a Performance Year will be paid in cash after certification by the outside auditors of the Company and the Committee that the performance goals have been satisfied, but not later than March 15^th of the calendar year following the Performance Year provided that the Annual Award for a particular Performance Year has not been deferred voluntarily pursuant to Section 4.2. The amounts required by law to be withheld for income and employment taxes will be deducted from the Annual Award payments. All Annual Awards become the obligation of the company on whose payroll the Officer/Employee is enrolled at the time the Committee makes the Annual Award.

4.2 Deferred Annual Awards.

(a) The payment of all or any portion (rounded to an even multiple of 10%) of a cash Annual Award may be deferred voluntarily at the election of an individual Plan participant in salary grades 19-25 and E-3 — E-9. Any such deferral will be net of any applicable FICA or FUTA taxes. A separate irrevocable election must be made prior to the Performance Year. Any Annual Award made by the Committee after termination of employment of a participant or retirement of a participant will be paid in accordance with any deferral election made within the enrollment period.

(b) At the time the participant makes a deferral election he or she must select the payment options (including the Payment Event as set forth at (c) below and the Payment Term as set forth at (d) below) applicable to the Deferred Annual Award for the Performance Year, as well as any earnings or income attributable to such amounts. The payment options elected will apply only to that year’s Deferred Annual Award and will not apply to any previous Deferred Annual Award or to any subsequent Deferred Annual Award. Any participant who elects to defer all or a portion of an Annual Award and who fails to select a Payment Event or a Payment Term will be presumed to have elected a Payment Event of Separation from Service in accordance with paragraph (c)(i) below and/or a Payment Term of a single sum.

(c) The Payment Event elected can be either:

(i) Separation from Service for any reason other than death. Payment will be made, or begin, in the later of: (1) January of the year

6

following the year of the Separation from Service; or (2) the seventh month after the month of the Separation from Service. Later installments, if any, will be paid in January of the succeeding years;

(ii) Payment upon attainment of a date certain that is more than 1 year after the last day of the applicable Performance Year. Later installments, if any, will be paid in January of the succeeding years; or

(iii) The earlier of (i) or (ii) above.

(d) Payment Term. At the time of electing to defer an Annual Award, the participant must also elect how he or she wishes to receive any such payment from among the following options (the participant may elect a separate Payment Term for each Payment Event elected):

(i) Payment in a single sum upon occurrence of the Payment Event.

(ii) Payment of a series of annual installment payments over a period from two (2) years to fifteen (15) years following the Payment Event. Each installment payment shall be equal to a fractional amount of the balance in the account the numerator of which is one and the denominator of which is the number of installment payments remaining. Although initially such installment payments will be identical, actual payments may vary based upon investment performance. For example, a series of 5 installment payments will result in a payout of 1/5 of the account balance in the first installment, 1/4 of the account balance (including investment gains or losses since the first installment date) in the second installment, etc.

(e) Changes to Payment Options. Once a payment option has been elected, subsequent changes which would accelerate the receipt of benefits from the Plan are not permitted, except that the Plan Administrator may at its discretion accelerate payments to the extent permitted by Code Section 409A and applicable regulations. A subsequent election to change the payment options related to a Payment Event, in order to delay a payment or to change the form of a payment, can only be made when all of the following conditions are satisfied:

(i) such election may not take effect until at least 12 months after the date on which the election is made;

(ii) the payment(s) with respect to which such election is made is deferred for a period of not less than 5 years from the date such

7

payment would otherwise have been made (or, in the case of installment payments under Section 4.2(d)(ii), 5 years from the date the first installment was scheduled to be paid); and

(iii) such election must be made not less than 12 months before the date the payment was previously scheduled to be made (or, in the case of installment payments under Section 4.2(d)(ii), 12 months before the first installment was scheduled to be paid), if the participant’s previous commencement date was a specified date.

(f) Investments. At the time of electing to voluntarily defer payment, the participant must elect how the Deferred Annual Award will be treated by the Company or Subsidiary. To the extent that any amounts deferred are placed in a rabbi trust with an independent record keeper, a participant who has previously deferred amounts under this Plan will automatically have his or her existing investment profile apply to this deferral also. All determinations of the available investment options by the Plan Administrator are final and binding upon participants. A participant may change the investment elections at anytime prior to the payment of the benefit, subject to any restrictions imposed by the Plan Administrator, the plan record keeper or by any applicable laws and regulations. A participant not making an election will have amounts deferred treated as if in a Lifestyle Fund under the Savings Plan for Employees of Consumers Energy and other CMS Energy Companies (the “Savings Plan”) applicable to the participant’s age 65, rounded up, or such other investment as determined by the Benefit Administration Committee. All gains and losses will be based upon the performance of the investments selected by the participant from the date the deferral is first credited to the nominal account. If the Company elects to fund its obligation as discussed below, then investment performance will be based on the balance as determined by the record keeper.

(g) The amount of any Deferred Annual Award is to be satisfied from the general corporate funds of the company on whose payroll the Plan participant was enrolled prior to the payout beginning and are subject to the claims of general creditors. This is an unfunded nonqualified deferred compensation plan. To the extent the Company or Subsidiary, as applicable, elects to place funds with a trustee to pay its future obligations under this Plan, such amounts are placed for the convenience of the Company or Subsidiary, remain the property of the Company or Subsidiary and the participant shall have no right to such funds until properly paid in accordance with the provisions of this Plan. For administrative ease and convenience, such amounts may be referred to as participant accounts, but as such are a notional account only and are not the property of the participant. Such amounts remain subject to the claims of the creditors of the Company or Subsidiary.

8

(h) Payment in the Event of an Unforeseeable Emergency. The participant may request that payments commence immediately upon the occurrence of an unforeseeable emergency as that term is defined in Code Section 409A and any applicable regulations. Generally, an unforeseeable emergency is a severe financial hardship resulting from an illness or accident of the participant or the participant’s spouse or dependent, loss of the participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the participant. A distribution on account of unforeseeable emergency may not be made to the extent that such emergency is or may be relieved through reimbursement or compensation from insurance or otherwise, by liquidation of the participant’s assets (without causing severe financial hardship), or by cessation of deferrals under this arrangement, the Savings Plan or other arrangements. Distributions because of an unforeseeable emergency shall not exceed the amount permitted under Section 409A and accordingly are limited to the amount reasonably necessary to satisfy the emergency need (after use of insurance proceeds, liquidation of assets, etc.) plus an amount to pay taxes reasonably anticipated as a result of the distribution. In the event any payment is made due to an unforeseeable emergency, all deferral elections for the current Performance Year will cease and the participant will not be eligible to make any deferral elections under this Plan for the following Performance Year. For any participant receiving a hardship withdrawal under the Savings Plan, all deferral elections under this Plan for the current Performance Year will cease and the participant will not be eligible to make any deferral elections under this Plan for the following Performance Year.

4.3 Payment in the Event of Death.

(a) A participant may name the beneficiary of his or her choice on a beneficiary form provided by the Company or record keeper, and the beneficiary shall receive, within 90 days of the participant’s death, in a single sum, all payments credited to the participant in the event that the participant dies prior to receipt of Deferred Annual Awards. If a beneficiary is not named or does not survive the participant, the payment will be made to the participant’s estate. In no event may any recipient designate a year of payment for an amount payable upon the death of the participant.

(b) A participant may change beneficiaries at any time, and the change will be effective as of the date the plan record keeper or Company accepts the form as complete. Neither the Company nor the applicable Subsidiary will be liable for any payments made before receipt and acceptance of a written beneficiary request.

9

V. CHANGE OF STATUS

Payments in the event of a change in status will not be made if no Annual Awards are made for the Performance Year.

5.1 Pro-Rata Annual Awards. A new Officer/Employee participant, whether hired or promoted to the position, or an Officer/employee promoted to a higher salary grade during the Performance Year will receive a pro rata Annual Award based on the percentage of the Performance Year in which the employee is in a particular salary grade. An Officer/Employee participant whose salary grade has been lowered, but whose employment is not terminated during the Performance Year will receive a pro rata Annual Award based on the percentage of the Performance Year in which the employee is in a particular salary grade.

5.2 Termination. An Officer/Employee participant whose employment is terminated pursuant to a violation of the Company code of conduct or other corporate policies will not be considered for or receive an Annual Award.

5.3 Resignation. An Officer/Employee participant who resigns prior to payment (during or after a Performance Year) will not be eligible for an Annual Award. If the resignation is due to reasons such as a downsizing or reorganization, or the ill health of the employee or ill health in the immediate family, the employee may petition the Plan Administrator and may be considered, in the discretion of the Plan Administrator, for a pro rata Annual Award. The Plan Administrator’s decision to approve or deny the request for a pro rata Annual Award shall be final.

5.4 Death, Disability, Retirement, Leave of Absence. An Officer/Employee participant whose status as an active employee is changed during the Performance Year due to death, Disability, Retirement, or Leave of Absence will receive a pro rata Annual Award. An Officer/Employee participant whose employment is terminated following the Performance Year but prior to payment due to death, Disability or Retirement will continue to be eligible for an Annual Award for the Performance Year. Any such payment or Annual Award payable due to the death of the Officer/Employee participant will be made to the named beneficiary, or if no beneficiary is named or if the beneficiary doesn’t survive the Officer/Employee participant, then to the Officer/Employee participant’s estate no later than March 15 following the applicable Performance Year. Notwithstanding the above, an Officer/Employee participant who retires, is on disability or Leave of Absence and who becomes employed by a competitor of CMS Energy or Consumers Energy or their subsidiaries or affiliates prior to award payout will forfeit all rights to an Annual Award, unless prior approval of such employment has been granted by the Committee. A “competitor” shall mean an entity engaged in the business of (1) selling (a) electric power or natural gas at retail or wholesale within the State of Michigan or (b) electric power at wholesale within the market area in which an electric generating plant owned by a subsidiary or affiliate of

10

CMS Energy is located or (2) developing an electric generating plant within the State of Michigan or a market area in which an electric generating plant owned by a subsidiary or affiliate of CMS Energy is located.

5.5 Clawback.

(a) If, due to a restatement of CMS Energy’s or an Affiliate’s publicly disclosed financial statements or otherwise, an Officer or Employee is subject to an obligation to make a repayment or return of benefits to CMS Energy or an Affiliate pursuant to a clawback provision contained in this Plan, a supplemental executive retirement plan, the Performance Incentive Stock Plan, or any other benefit plan (a “benefit plan clawback provision”) of the Company, it shall be a precondition to the payment of any award under this Plan, that the Officer or Employee fully repay or return to the Company any amounts owing under such benefit plan clawback provision. Any and all awards under this Plan are further subject to any provision of law which may require the Officer or Employee to forfeit or return any benefits provided hereunder, in the event of a restatement of the Company’s publicly disclosed accounting statements or other illegal act, whether required by Section 304 of the Sarbanes-Oxley Act of 2002, federal securities law (including any rule or regulation promulgated by the Securities and Exchange Commission), any state law, or any rule or regulation promulgated by the applicable listing exchange or system on which the Company lists its traded shares.

(b) To the degree any benefits hereunder are not otherwise forfeitable pursuant to the preceding sentences of this Section 5.5, the Board or a Committee delegated authority by the Board (“delegated Committee”), may require the Officer or Employee to return to the Company or forfeit any amounts granted under this Plan, if:

1. the grant of such compensation was predicated upon achieving certain financial results which were subsequently the subject of a substantial accounting restatement of the Company’s financial statements filed under the securities laws (a “financial restatement”),

2. a lower payout or Annual Award (“reduced financial results”), would have occurred based upon the financial restatement, and

3. in the reasonable opinion of the Board or the delegated Committee, the circumstances of the financial restatement justify such a modification of the Annual Award. Such circumstances may include, but are not limited to, whether the financial restatement was caused by misconduct, whether the financial restatement affected more than one period and the reduced financial results in

11

one period were offset by increased financial results in another period, the timing of the financial restatement or any required repayment, and other relevant factors.

Unless otherwise required by law, the provisions of this Subsection (b) relating to the return of previously paid Plan benefits shall not apply unless a claim is made therefore by the Company within three years of the payment of such benefits.

(c) The Board or delegated Committee shall also have the discretion to require a clawback in the event of a mistake or accounting error in the calculation of a benefit or an award that results in a benefit to an eligible individual to which he/she was not otherwise entitled. The rights set forth in this Plan concerning the right of the Company to a clawback are in addition to any other rights to recovery or damages available at law or equity and are not a limitation of such rights.

VI. MISCELLANEOUS

6.1 Impact on Benefit Plans. Payments made under the Plan will be considered as earnings for the Supplemental Executive Retirement Plans but not for purposes of the Employees’ Savings Plan, Pension Plan, or other employee benefit programs.

6.2 Impact on Employment. Neither the adoption of the Plan nor the granting of any Annual Award under the Plan will be deemed to create any right in any individual to be retained or continued in the employment of the Company or any corporation within the Company’s control group.

6.3 Termination or Amendment of the Plan. The Board of Directors of the CMS Energy Corporation may amend or terminate the Plan at any time. Upon termination, any Deferred Annual Award accrued under the Plan will remain in the Plan and be paid out in accordance with the payment options previously selected. The Plan Administrator is authorized to make any amendments that are deemed necessary or desirable to comply with any applicable laws, regulations or orders or as may be advised by counsel or to clarify the terms and operation of the Plan. The Company may terminate the Plan and accelerate payment of any deferred benefits under the Plan if it acts consistent in all respects with the requirements of Code Section 409A and any applicable regulations with respect to when a terminated plan may accelerate payment to a participant.

6.4 Governing Law. The Plan will be governed and construed in accordance with the laws of the State of Michigan.

6.5 Dispute Resolution. Any disputes related to the Plan must be brought to the Plan Administrator. The Plan Administrator is granted full discretionary authority to apply the terms of the Plan, make administrative rulings, interpret the Plan and make any other determinations with respect to the Plan. If the Plan Administrator

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makes an adverse determination and the participant disagrees with or wishes to appeal the determination, the participant must appeal the decision to the Plan Administrator, in writing and not later than 60 days from when the determination was mailed to the participant. If the participant does not timely appeal the original determination, the participant has no further rights under the Plan with respect to the matter presented in the claim. If the participant appeals the original determination and that appeal does not result in a mutually agreeable resolution, then the dispute shall be subject to final and binding arbitration before a single arbitrator selected by the parties to be conducted in Jackson, Michigan, provided the participant makes such request for arbitration in writing within 30 days of the final decision by the Plan Administrator. The arbitration will be conducted and finished within 90 days of the selection of the arbitrator. The parties shall share equally the cost of the arbitrator and of conducting the arbitration proceeding, but each party shall bear the cost of its own legal counsel and experts and other out-of-pocket expenditures. The arbitrator must use an arbitrary and capricious standard of review when considering any determinations and findings by the Plan Administrator.

VII. AMENDMENT TO REFLECT CODE SECTION 409A

7.1 Code Section 409A. This Plan has been amended, effective as of January 1, 2005, to comply with the requirements of Section 409A of the Code. To the extent counsel determines additional amendments may be reasonable or desirable in order to comply with Code Section 409A, and any other applicable rules, laws and regulations, such changes shall be authorized with the approval of the Plan Administrator.

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EX-10.5

Exhibit 10.5

DEFINED CONTRIBUTION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

The objective of the Defined Contribution Supplemental Executive Retirement Plan is to attract and motivate top level executives, including those recruited in mid- or late-career. This Supplemental DC Plan is designed to provide additional retirement income to supplement that provided under the applicable Qualified Plans.

This Supplemental DC Plan is effective April 1, 2006 for employees hired into or promoted to a Covered Executive Position on or after April 1, 2006 and includes amendments through April 1, 2011. This Supplemental DC Plan replaces any Cash Balance SERP benefit credited to any Employee from July 1, 2003 to April 1, 2006. An amount equal to the accrued Cash Balance SERP has been transferred to this Plan and placed as a contribution to the Participant Account.

SECTION I. DEFINITIONS

Whenever used in this Supplemental DC Plan, the following terms shall have the respective meanings set forth below, unless the context clearly indicates otherwise.

Account or Account Balance	The notional amount credited to a Participant or beneficiary in accordance with the provisions of this Supplemental DC Plan.
Code	The Internal Revenue Code of 1986, as amended.
Company	CMS Energy Corporation and its subsidiaries which are directly or indirectly owned 80% or greater. For purposes of determining a Separation from Service from the Company, the Company shall include CMS Energy Corporation and all persons or entities that would be considered a single employer under Code Section 414(b) or Section 414(c), using for such purposes a “50 percent” standard, instead of an “80 percent” standard, under such provisions.
Company Contribution	The amount, which is a notional amount, contributed by the Employer on behalf of a Participant in accordance with Section III of this Supplemental DC Plan.
Compensation	A Participant’s regular salary from an Employer, before any adjustment for deferrals under any deferred compensation plan of the Company, any reductions for contributions to the Savings Plan, any reductions under any welfare benefit plan or deductions for taxes or other withholdings, but excluding any bonus, imputed income, incentive or other premium pay.
Covered Executive Position	A position with a Company where the Employee is classified as a Salary Grade 24 or above.
DB SERP	The Defined Benefit Supplemental Executive Retirement Plan. The DB SERP Plan is closed for new participants as of April 1, 2006.
Employee	Any person, employed by the Company as an exempt salaried employee at Salary Grade 24 or above, and on the payroll and employment records system as an employee, (excluding consultants, advisors and independent contractors).
Employer	The entity within the Company that employs the Participant.

Incentive Compensation	An amount paid to a Participant in a Plan Year under the terms of the Annual Employee Incentive Compensation Plan or the Annual Officer Incentive Compensation Plan.
Participant	Any Employee who meets or met the eligibility requirements of the Plan and for whom Contributions are made or were previously made under the Plan which have not been distributed.
Payment Event	The time when the Participant may receive the benefits deferred under the Plan as described in Section VI.1.
Payment Term	The form and duration of any payment to a Participant or beneficiary as described in Section VI.2.
Plan or Supplemental DC Plan	The Defined Contribution Supplemental Executive Retirement Plan.
Plan Administrator	The Benefit Administration Committee as selected by the Chief Executive Officer and Chief Financial Officer of the Company to manage the plan.
Plan Record Keeper	The person(s) or entity named as such by the Plan Administrator.
Plan Year	January 1 to December 31 of a calendar year.
Qualified Plan	A pension plan providing benefits for a broad group of employees and meeting the requirements for a qualified plan under the Code.
Savings Plan	The Savings Plan for Employees of Consumers Energy and other CMS Energy Companies.
Separation from Service	If an Employee retires or otherwise has a separation from service from the Company as defined under Code Section 409A and any applicable regulations. The Plan Administrator will determine, consistent with the requirements of Code Section 409A and any applicable regulations, to what extent a person on a leave of absence, including on paid sick leave pursuant to Company policy, has incurred a Separation from Service. Notwithstanding the above, a Separation from Service will occur consistent with the requirements of Code Section 409A when it is reasonably anticipated that the future level of bona fide services provided by the Employee (whether as an employee or as an independent contractor) will be no more than 45% of the average level of bona fide services performed by the Employee (whether as an employee or as an independent contractor) over the immediately preceding 36-month period (or the full period of service if less than 36 months).
Threshold Limit	The amount as determined from time to time by the Secretary of the Treasury above which annual compensation is disregarded for Qualified Plans. As of January 1, 2011, the Threshold Limit is $245,000.

SECTION II. ELIGIBILITY AND ENROLLMENT

1.	Each Employee in a Covered Executive Position who is not a participant in the DB SERP is a Participant in this Plan as of the date of hire or promotion to a Covered Executive Position. Enrollment is automatic upon eligibility to participate.
2.	Any employee in a Salary Grade E-3 or above who is covered under this Plan must retire and incur a Separation from Service at age 65 unless such employee is specifically asked in writing,

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not less than six months prior to turning age 65, to remain as an active employee by the Compensation and Human Resources Committee of the Board of Directors of CMS Energy Corporation. The request will be for a one-year period of time, but may be renewed each subsequent year at the discretion of the Compensation and Human Resources Committee, or any replacement committee. This provision will apply only to the extent that it is consistent with Section 631(c) of the Age Discrimination in Employment Act.

SECTION III. COMPANY CONTRIBUTION

This Supplemental DC Plan is a defined contribution non-qualified deferred compensation plan. The benefit provided for under this Supplemental DC Plan is equal to the Company Contribution to the Participant Account as well as the gains or losses attributable to the performance of the investments selected by the Participant. The Company Contribution will be credited to the Participant Account not less frequently than annually and shall be determined based upon the Participant’s classification as of the date the Company Contribution is credited to the Participant Account. The Company Contribution shall be based upon the Participant’s salary grade and Compensation as follows:

1.	A Participant in Salary Grades 24 through E-2 will receive a Company Contribution equal to 5% of Compensation in excess of the Threshold Limit and 5% of any Incentive Compensation paid to the Participant during the Plan Year.
2.	A Participant in Salary Grades E-3 through E-5 will receive a Company Contribution equal to 5% of Compensation up to the Threshold Limit, plus 10% of Compensation in excess of the Threshold Limit and 10% of any Incentive Compensation paid to the Participant during the Plan Year.
3.	A Participant in Salary Grades E-6 and higher will receive a Company Contribution equal to 10% of Compensation up to the Threshold Limit, plus 15% of Compensation in excess of the Threshold Limit and 15% of any Incentive Compensation paid to the Participant during the Plan Year.

Any reference to Incentive Compensation paid to a Participant during a Plan Year includes amounts that would have been paid but for the election of the Participant to defer any amount of Incentive Compensation.

SECTION IV. INVESTMENTS

1.

Designation of Investments. The Participant shall specify the proportions of the Company Contribution to be treated as if invested among the various options available as investment funds under this Supplemental DC Plan. A Participant who already has deferred amounts under a nonqualified deferred compensation plan of the Company will automatically have his or her existing investment profile apply to the Company Contribution.

All determinations of the available investments by the Plan Administrator are final and binding upon the Participants. If a Participant fails to make an investment election, then such amounts shall be accounted for as if contributed to a Target Date Fund (as that term is defined in the Savings Plan) with a date that is applicable to the Participant’s age 65, rounded up, or such other investments as determined by the Plan Administrator.

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2.

Changes in Investment Elections. All investment elections may be changed prospectively at the Participant’s election at any time prior to the payment of the benefit subject to any applicable restrictions imposed by the Plan Administrator, the Plan Record Keeper or by any laws and regulations.

3.

Determination of Investment Earnings. All gains and losses will be based upon the performance of the investments selected by the Participant from the date any Company Contribution is first credited to the Participant Account. If the Company elects to fund the Accounts for its convenience as described in Section VIII.5, then investment performance will be based on the balance in the Participant Account pursuant to the customary procedures of the Plan Record Keeper.

V. VESTING AND RECOUPMANT

1.	Vesting. A Participant will be fully vested in this Supplemental DC Plan only upon completion of five full years of service as a Participant in this Supplemental DC Plan (including any service as a Participant under the Cash Balance SERP) and attainment of age 62. During the first five years of participation, the Participant’s vested percentage is 0%. Upon completing five full years as a Participant in this Supplemental DC Plan, the Account Balance will vest linearly from the date of plan eligibility to age 62; ratably each year such that at age 62 the benefit is 100 percent vested. As an example, an Employee hired or promoted on June 1, 2007 at age 52 will not receive any vesting credit until June 1, 2012 at age 57. At that time the Participant will be 50% vested, as there are 10 years from the date of inclusion in the Plan to age 62, so the Participant vests 10% for each year in the Plan. At age 62 the Participant is 100% vested. An Employee first hired at age 57 or older will be 100% vested upon five years of participation in this Supplemental DC Plan. In determining the percentage of vesting, the Participant’s age will be counted using whole years only without rounding and without regard to the number of months past the Participant’s last birthday. Notwithstanding the above, if a Participant incurs a “disability”, as that term is defined under Code Section 409A and any relevant regulations, then such Participant shall vest in the entire Account Balance as of the disability date. The Account Balance will vest in full upon the death of a Participant or the mandatory retirement of a Participant under Section II.2.
	As the Company Contributions vest, the Participant’s Account Balance will be reduced by an amount equal to the employee’s share of any applicable FICA and FUTA taxes in accordance with the applicable regulations under Code Section 409A. To the extent required by law, the Participant will be imputed with income for the value of the taxes paid through the reduction of the Account Balance.
2.	Recoupment. Any Company Contributions are also subject to recoupment as required by applicable law.

VI. PAYMENT OPTIONS

1.	Payment Events. This Supplemental DC Plan provides for payment of benefits upon Separation from Service or as otherwise specified in this Plan document.
2.	Payment Term. Each newly hired or promoted Participant will receive his or her payment in a single sum in the later of (i) January of the year following the year of

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	Separation from Service or if later, (ii) the first day of the seventh month following Separation from Service.
3.	Changes in Payment Options. Subsequent changes to the original Payment Term which would accelerate the receipt of benefits from the Plan are not permitted, except that the Plan Administrator may at its sole discretion elect to accelerate payments to the extent permitted by Code Section 409A and applicable regulations. A subsequent election by a Participant to change the Payment Term can be made when both of the following conditions are satisfied:
	(a) any such election may not take effect until at least 12 months after the date on which the election is made; and
	(b) the payment(s) with respect to which such election is made is deferred for a period of not less than 5 years from the date such payment would otherwise have been made or, in the case of installment payments, 5 years from the date the first installment was scheduled to be paid.
	When making a subsequent election, the Participant may elect to receive either a single sum or a series of annual installment payments over a period from two (2) years to fifteen (15) years. If installment payments are elected, each installment payment shall be equal to a fractional amount of the original balance in the Account the numerator of which is one and the denominator of which is the number of installment payments remaining. For example, a series of five installment payments will result in a benefit equal to one fifth of the Account Balance for the first installment, one fourth of the Account Balance for the second installment, one third of the Account Balance for the third installment one half of the Account Balance for the fourth year and in the fifth installment the Account Balance is paid in full. Each installment, because of gains and losses may not be identical to the prior installment.
4.	Payment Upon the Death of the Participant. In the event of the death of a Participant prior to the start of any payments under the Plan, the Participant’s named beneficiary or beneficiaries shall receive the entire Account Balance under the Plan within 90 days following the death of the Participant. In the event of the death of a Participant after commencing payment of benefits, the Participant’s named beneficiary or beneficiaries shall receive the remaining Account Balance in a single sum within 90 days following the death of the Participant. If the Participant fails to name a beneficiary, the Account Balance will be paid in a single sum to his or her estate within 90 days following the death of the Participant. In no event may any recipient designate a year of payment for an amount payable upon the death of the Participant.

VII. NON-ALIENATION OF BENEFITS

Except as may be required by a domestic relations order as described in Code Section 414(p)(1)(B), in no event shall the Plan Administrator pay or assign over any part of the interest of a Participant under the Plan, or his or her beneficiary or beneficiaries, which is payable, distributable or credited to his or her Account, to any assignee or creditor of such Participant or his or her beneficiary or beneficiaries. Prior to the time of distribution, a Participant, his or her beneficiary or beneficiaries or legal representative shall have no right by way of anticipation or

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otherwise to assign or otherwise dispose of any interest which may be payable, distributable or credited to the Account of the Participant or his or her beneficiary or beneficiaries under the Plan, and every attempted assignment or other disposition of such interest in the Plan shall not be merely voidable but absolutely void.

VIII. ADMINISTRATION OF PLAN

1.	Plan Administrator. The Plan Administrator shall have authority to take necessary actions to implement the Plan and is granted full discretionary authority to apply the terms of the Plan, make administrative rulings, interpret the Plan and make any other determinations with respect to all aspects of the Plan. Any Participant with a claim under the Plan must make a written request within 60 days to the Plan Administrator for a determination on the claim. If the claim involves a benefit or issue relevant to an individual who has been appointed to the Benefit Administration Committee, the individual so affected shall not participate in any determination on such issue. The Plan Administrator may hire such experts, accountants, or attorneys as it deems necessary to make a decision and may rely on the opinion of such persons in making a determination. The Plan Administrator shall notify the Participant of its determination in writing within 60 days of the claim unless the Plan Administrator advises the Participant that it requires additional time (not to exceed 90 days) to complete its investigation. The Participant may, within 60 days from the date the determination was mailed to the Participant, request a redetermination of the matter, and provide any additional information for the Plan Administrator to consider in its redetermination. The Plan Administrator will issue its opinion within 60 days of the request for redetermination unless the Plan administrator advised the Participant that it requires additional time (not to exceed 90 days) to complete its redetermination of the matter.
2.	Administrative Expenses. Any administrative expenses, costs, charges or fees, to the extent not paid by the Company are to be charged to the Participant Accounts in accordance with the Plan Record Keeper’s normal procedures.
3.	Amendment or Termination of the Plan. The Company may amend or terminate the Plan at anytime. Upon termination, any vested Account Balance will remain in the Plan and be paid out in accordance with the Payment Term. While the Account Balance will continue to be subject to investment gains and losses, no further Company Contributions will be made to the Plan. The Plan Administrator is authorized to make any amendments that are deemed necessary or desirable to comply with any applicable laws, regulations or orders or as may be advised by counsel or to clarify the terms and operation of the Plan. Notwithstanding the above, no termination of the Plan will accelerate any benefits under the Plan unless such termination is consistent with the requirements of Section 409A of the Internal Revenue Code and any applicable regulations, with respect to when a terminated plan may accelerate payment to a Participant.
4.	Naming a Beneficiary. A Participant may at any time file a beneficiary designation with the Plan Record Keeper. Only one such beneficiary designation, the most recent received by the Plan Record Keeper, is effective at any time. No beneficiary designation is effective until it is received by the Plan Record Keeper. If a Participant fails to name a beneficiary, any benefit payable under the Plan will be paid to the Participant’s estate. A Participant must name a separate beneficiary for each non-qualified plan.

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5. Funding. This is an unfunded nonqualified deferred compensation plan. To the extent the Company elects to place funds with a trustee to pay its future obligations under this Plan such amounts are placed for the convenience of the Company, remain the property of the Company and the Participant shall have no right to such funds until properly paid in accordance with the provisions of this Plan. For administrative ease and convenience, such amounts may be referred to as Participant Accounts, but as such are a notional account only and are not the property of the Participant. Such amounts are subject to the claims of the creditors of the Company.

IN WITNESS WHEREOF, execution is hereby effected this 1st day of April, 2011.

ATTEST:	CMS ENERGY CORPORATION
/s/ Catherine M. Reynolds	/s/ John Russell
Vice President and Secretary	Chief Executive Officer, CMS Energy and
	Consumers Energy
Date: April 1, 2011

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EX-10.6

Exhibit 10.6

SUPPLEMENTAL EXECUTIVE RETIREMENT
PLAN FOR EMPLOYEES OF
CMS ENERGY / CONSUMERS ENERGY COMPANY

INTRODUCTION

The objective of the Supplemental Executive Retirement Plan is to retain and motivate top level executives by providing additional retirement income to supplement that provided by the Pension Plan.

The Supplemental Executive Retirement Plan became effective on January 1, 1982 and is applicable to all employees of the Company who are eligible in accordance with the provisions of this Supplemental Plan. This document includes all amendments through April 1, 2011.

This instrument describes the Supplemental Plan for employees who retire, die or whose services are terminated on or after January 1, 2005. The rights of employees who, prior to January 1, 2005, retired, died or whose services were terminated are governed by the provisions of the instrument in effect at such time. This Supplemental Plan is an unfunded, unsecured promise to pay benefits at a later date. Subject to the provisions of this Supplemental Plan, Participants have no greater rights than the general creditors of the Company.

SECTION I. DEFINITIONS

Whenever used in this Supplemental Plan, the following terms shall have the respective meanings set forth below, unless the context clearly indicates otherwise.

“Accrued Supplemental Executive Retirement Income”	Means the Supplemental Executive Retirement Income beginning on the first of the month following attainment of age 65, which would be payable to a Participant at the rates provided in subsection 1 of Section V, on the basis of his Accredited Service and Preference Service rendered to the date of computation.
“Accredited Service”	The period of service subsequent to inclusion in the Pension Plan.
“Code”	The Internal Revenue Code of 1986, as amended.
“Company”	Means CMS Energy Corporation and Consumers Energy Company and any subsidiary owned 80% and whose employees participate in the Pension Plan. For purposes of determining a Separation from Service from the Company, the Company shall include CMS Energy Corporation and all persons or entities that would be considered a single employer under Code Section 414(b) or Section 414(c), using for such purposes a “50 percent” standard, instead of an “80 percent” standard, under such provisions.
“Disability Service”	Means the Accredited Service and Preference Service granted a Participant as provided in subsection 5 of Section V.

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“Disability Service Pension Supplement”	Means the pension supplement, provision for which is made in subsection 5 of Section V of this Supplemental Plan.
“Earnings”	Means the regular salary paid to the Participant during the Fiscal Year January 1 — December 31.
“Employment Agreement”	Means a Severance or Change in Control Agreement (Tier I, Tier II, Tier III or Tier IV) authorized by the Compensation and Human Resources Committee of the Board of Directors of CMS Energy Corporation and entered into between a Participant and CMS Energy Corporation or a subsidiary.
“Final Executive Pay”	Means 1/12th of the average of the Earnings (without regard to any limitations imposed on the Pension Plan by the Internal Revenue Code or Regulations thereunder) plus Incentive Compensation (if any) of a Participant, including any such amounts deferred, for his five years of highest totals of Earnings plus Incentive Compensation (if any) during the period of his Accredited Service. For purposes of determining Final Executive Pay, Accredited Service shall include only the service provided while the Participant holds a position that qualifies for inclusion under this Supplemental Plan.
“Incentive Compensation”	Means the applicable amount awarded to the Participant under an Annual Incentive Compensation Plan of the Company during a Plan Year.
“Participant”	Means an employee of the Company included in the Supplemental Plan pursuant to Section II.
“Payment Options”	Means the form of benefit payments elected by a Participant under Section VI.
“Pension Plan”	Means the Pension Plan for Employees of Consumers Energy Company, as amended.
“Plan Administrator”	Means the Benefit Administration Committee as selected by the Chief Executive Officer and Chief Financial Officer of the Company to manage this Supplemental Plan.
“Preference Service”	Means the period of service credited to a Participant pursuant to Section III.
“Provisional Payee”	Means the individual named by the Participant pursuant to Section VI(1)(C) to receive a benefit upon his death.

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“Retirement Income”	Means the income which would be payable to the Participant from the Pension Plan if the Participant were to elect to start a monthly benefit as of the applicable date.
“Separation from Service”	Means the Employee retires or otherwise has a separation from service from the company as defined under Code Section 409A and any applicable regulations. The Plan Administrator will determine, consistent with the requirements of Code Section 409A and any applicable regulations, to what extent a person on a leave of absence, including on paid sick leave pursuant to Company policy, has incurred a Separation from Service. Notwithstanding the above, a Separation from Service will occur consistent with the requirements of Code Section 409A when it is reasonably anticipated that the future level of bona fide services provided by the Employee (whether as an employee or as an independent contractor) will be no more than 45% of the average level of bona fide services performed by the Employee (whether as an employee or as an independent contractor) over the immediately preceding 36-month period (or the full period of services, if less than 36 months).
“Supplemental Executive Retirement Income”	Means the monthly retirement income provided for by this Supplemental Plan.
“Supplemental Plan or Plan”	Means the Supplemental Executive Retirement Plan as it is described in this instrument.

The masculine pronoun wherever used herein shall mean or include the feminine pronoun.

SECTION II. ELIGIBILITY

1. Employees included on January 1, 1982. Each officer or other executive of the Company in Salary Grades E-1 and above on January 1, 1982, who is eligible for inclusion in the Pension Plan on that date, will be included in the Supplemental Plan as of January 1, 1982.

2. Employees included after January 1, 1982. Each officer or other executive of the Company who is eligible for inclusion in the Pension Plan and is appointed to a position at Salary Grade E-1 or above after January 1, 1982, will be included in the Supplemental Plan on the first day of the month after he assumes such a position. Effective May 1, 1995, an officer or executive of Consumers Energy who is eligible for inclusion in the Pension Plan and is appointed to a position at Salary Grade F or above will be included in the Supplemental Plan on the first day of the month after he assumes such position. Any employee hired or promoted to a Salary Grade F or above (E-1 or above for CMS employees) on or after July 1, 2003 and who is not eligible for inclusion in the final average pay provisions of the Pension Plan will not be included in this Plan. Effective as of January 1, 2004, the Salary structure for non-officer employees of CMS Energy Corporation and its subsidiaries was modified and as of that date, executives promoted to or hired at a Salary Grade 24 or above and who are covered under the final average pay provisions of the Pension Plan are eligible for this Supplemental Plan.

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3. Exclusion of additional participants. Effective as of April 1, 2006 no additional employees will be included in this Supplemental Plan. Employees first hired at or promoted to a Salary Grade 24 or above on or after April 1, 2006 will not be eligible for benefits under this Supplemental Plan. Employees previously covered under this Supplemental Plan who were not accruing benefits under this Supplemental Plan as of March 31, 2006, and who are reemployed or promoted to a Salary Grade 24 or above on or after April 1, 2006 will not resume participation in this Supplemental Plan.

SECTION III. DETERMINATION OF PREFERENCE SERVICE

Preference Service. Each Participant at a Salary Grade E-3 or above shall be credited with one month of Preference Service for each month of Accredited Service credited to him under the Pension Plan until the sum of Accredited Service and Preference Service equals 20 years. Preference Service will be reduced by the amount (if any) by which the total period of Preference Service when added to the total period of Accredited Service exceeds 35 years.

SECTION IV. RETIREMENT

Retirement dates for the purposes of this Supplemental Plan shall be the later of Separation from Service or age 55; provided, however, that a Participant must have five years of actual service at an applicable salary grade to be eligible for Supplemental Executive Retirement Income. Notwithstanding the above, any employee in a Salary Grade E-3 or above must retire and incur a Separation from Service at age 65 unless such employee is specifically asked in writing not less than six months prior to age 65, to remain as an active employee by the Compensation and Human Resources Committee of the Board of Directors of the Company. The request will be for a one-year period of time, but may be renewed each subsequent year at the discretion of the Compensation and Human Resources Committee, or any replacement committee. This provision will apply only to the extent that it is consistent with Section 631(c) of the Age Discrimination in Employment Act.

SECTION V. SUPPLEMENTAL EXECUTIVE RETIREMENT INCOME

1. Normal or Deferred Supplemental Executive Retirement Income. The monthly Supplemental Executive Retirement Income payable to a Participant who, incurs a Separation from Service on or after September 1, 2005, will be an amount equal to the product of the Participant’s Final Executive Pay times the sum of the percentages determined below, plus, for each employee who retires with 35 years of Accredited Service under the Pension Plan, an amount equal to $20.00 for each additional full year of vested service that would otherwise have been credited as Accredited Service but for the application of the minimum age requirements in the Pension Plan or the 35-year Accredited Service maximum, minus (i) .5% multiplied by 1/12th of the Participant’s “Final Average Compensation” up to “Covered Compensation” (as those terms are used in Section 401(l) of the Internal Revenue Code) for each year of Accredited Service and Preference Service and (ii) the Retirement Income provided or credited to the Participant under the Pension Plan:

2.1% for each of the first 20 years of Accredited Service and Preference Service.

1.7% for each of the next 15 years of Accredited Service and Preference Service (1.5% for Participant’s Separating from Service after January 1, 2005 but prior to August 1, 2005).

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2. Early Supplemental Executive Retirement Income. The monthly Supplemental Executive Retirement Income payable to a Participant who, incurs a Separation from Service on or after age 55 but prior to age 65, will be the amount of his Accrued Supplemental Executive Retirement Income on the date his retirement commences, reduced by 5/12th of 1% for each month by which his Early Retirement Date precedes his age 62.

The monthly Supplemental Executive Retirement Income payable to a Participant who separates from service prior to age 55 with a vested benefit that is not otherwise forfeited, will be the actuarial equivalent (currently established by the Plan actuary as 38.3%), payable at age 55, of the accrued Supplemental Executive Retirement Income.

3. Payments Under this Supplemental Plan. The payments provided for in this Supplemental Plan shall be made by the Company at such times as required under this Supplemental Plan; provided, however, that, while the Company hopes and expects to make the payments provided for under this Supplemental Plan, such payment is not guaranteed. Payments under this Supplemental Plan may be accelerated or delayed only to the extent permitted by Code Section 409A.

4. Establishment of Fund. The Company may establish a fund, as part of the general assets of the Company, and subject to the claims of the general creditors of the Company, to provide for the payments required under this Supplemental Plan.

5. Disability Service Pension Supplement. If a Participant is totally disabled (unable to perform the Participant’s regular job because of disease or injury) and, as a result, fails to accumulate Accredited Service under the Pension Plan for some period of time, a Disability Service Pension Supplement will be calculated and paid as if Accredited Service and applicable Preference Service were credited during such period subject to the following:

A.	The period of Disability Service begins when the Participant stops accumulating Accredited Service under the Pension Plan as a result of the Participant’s total disability, provided that the Participant has not undertaken other employment.
B.	The period of Disability Service ends when the Participant first:

(i)	Begins again to accumulate Accredited Service under the Pension Plan,
(ii)	Undertakes other employment,
(iii)	Attains age 55.

C. The “Final Executive Pay” of the Participant, for purposes of determining the Disability Pension Supplement only, will be calculated as if the Participant were earning during the period of Disability Service the sum of (1) the Participant’s last monthly rate of basic earnings prior to the period of Disability Service, and (2) 1/12th of the average of the Incentive Compensation (if any) for the five years of Accredited Service while in an eligible salary grade immediately preceding the period of Disability Service (or the monthly average of Incentive Compensation earned over the Participant’s Accredited Service if the Participant has fewer than five years of Accredited Service while in an eligible salary grade), increased or decreased each July 1, following the beginning of the Participant’s period of Disability Service, according to the change in the Bureau of Labor Statistics Consumer Price Index (CPI-W) for the preceding 12-month period of Disability Service (or lesser period of Disability Service, if applicable). However, no July 1 increase or decrease will exceed an amount

5

which could result in an increase greater than a 5% compounded annual increase since the beginning of the Participant’s period of Disability Service, or in a reduction in the Participant’s Final Executive Pay to an amount less than the Participant’s Final Executive Pay prior to the period of Disability Service. For purposes of this provision, the Consumer Price Index for the second month previous to any measurement date will be deemed to be in effect on such date.

D.

The amount of the Disability Service Pension Supplement is the Supplemental Executive Retirement Income, calculated using Final Executive Pay as determined in Section V, subsection 5.C above, and giving credit for Accredited Service and applicable Preference Service for any period of Disability Service, less:

(i)	The Supplemental Executive Retirement Income calculated without regard to the Disability Service Pension Supplement,
(ii)	The Retirement Income that is or would be provided by the Pension Plan if the Participant elected to retire, and
(iii)	Any amount paid to a retired Participant for lost benefits under the Pension Plan, for the period of Disability Service, under a disability insurance policy, the premiums for which were paid in whole or in part by CMS Energy Corporation or any subsidiaries which are at least 80% owned, directly or indirectly, by CMS Energy Corporation.

E. Payments will begin as of the later of i) the first of the month following the Participant’s attainment of age 55, or ii) the seventh month following the Participant’s separation from service due to disability.

SECTION VI. PAYMENT OPTIONS AND
PRE-RETIREMENT SURVIVOR BENEFIT

1. Payment Options. Prior to December 31, 2007, a Participant must elect to receive his benefit in either a Single Sum Option or a Monthly Annuity Option. This Payment Option elected by a Participant may not be changed after December 31, 2007. Any Participant failing to make a Payment Election prior to December 31, 2007 will be presumed to have elected to continue to receive the Monthly Annuity Option. Under either Payment Option benefit payments will commence on: i) the first day of the seventh month following Separation from Service if a Participant incurs a Separation from Service on or after age 55; or, ii) if a Participant incurs a Separation from Service prior to age 55, the later of age 55 or the first day of the seventh month following Separation from Service. For persons incurring a Separation from Service in 2007, the benefit option will be that elected on or before December 31, 2006.

A. The Single Sum Payment will be determined by:

(i) The present value of the Participant’s Supplemental Executive Retirement Income determined on the basis of the benefit the Participant would have been entitled to on the first day of the month following the later of his 65th birthday or his Retirement Date. The benefit will be the present value of the deferred annuity if the Supplemental Executive Retirement Income commences prior to age 65 and will not include any early retirement subsidies in Section V(2) of this Supplemental Agreement;

6

(ii)	Payment will be based upon the mortality tables used by the Pension Plan for computing Single Sums. The interest rate will be based on the earnings assumption used to comply with Financial Accounting Standard 87 under the Pension Plan (which is based on the assumed rate of return on assets) or such other reasonable mortality table or interest assumptions as the Plan Administrator may adopt from time to time;
(iii)	Payment will not include any amounts otherwise forfeited under this Supplemental Plan; and
(iv)	If a Participant dies after Separation from Service after age 55, but prior to payment of the Single Sum, his or her estate will receive the present value of the Single Sum on the first day of the seventh month following the Separation from Service.

B. Payment of the Monthly Annuity Option will be made to the Participant as follows:

(i)

If the Monthly Annuity is scheduled to commence upon the seventh month following Separation from Service, the initial payment will include the payments for the six months prior to the payment date, less any applicable taxes and other withholdings. No interest or lost value of money will be paid on the benefits. If a Participant dies prior to receipt of the initial payment, any payments for months prior to his death will be made to his Provisional Payee, if any survives him, or to his estate on the first day of the seventh month following his Separation from Service.

(ii)

If the Monthly Annuity is scheduled to start at age 55, the benefit will commence the later of the first of the month following the Participant’s 55th birthday or the seventh month following Separation from Service. If the Participant dies after age 55 but prior to receipt of the initial payment, any payments for months prior to his death will be made to his Provisional Payee, if any survives him, or to his estate on the date the payment would have been made to the Participant had he survived.

C. A Participant electing a Monthly Annuity Option may, at any time prior to commencement of benefits, elect an actuarially equivalent joint and survivor annuity benefit. For this purpose, actuarial equivalence shall be determined by the Plan’s actuary (as selected by the Plan Administrator) applying reasonable actuarial methods and assumptions, and in accordance with the other applicable rules under Code Section 409A and applicable regulations including 1.409A-2(b)(2)(ii). A joint and survivor annuity provides a benefit to the Participant for his life and upon his death, provides a lifetime benefit to a Provisional Payee. A Participant may name a Provisional Payee or change his Provisional Payee at any time that is administratively reasonable, but not less than 8 days prior to (i) Separation from Service on or after age 55; or (ii) 30 days prior to age 55 for a Participant Separating from Service prior to age 55. A Participant may elect from the following Monthly Annuity Options:

(i)	a 100% Annuity payable to him for his life with no Provisional Payee (the standard benefit if no other election is made);
(ii)	an actuarially reduced equivalent benefit to provide a monthly annuity for his life with a 50% survivor annuity to his named Provisional Payee;
(iii)	an actuarially reduced equivalent benefit to provide a monthly annuity for his life with a 75% survivor annuity to his named Provisional Payee;

7

(iv)

an actuarially reduced equivalent benefit to provide a monthly annuity for his life with a 100% survivor annuity to his named Provisional Payee; or

(v)

an actuarially reduced equivalent benefit to provide a monthly annuity for his life, provided that if he dies less than 10 years following payment commencement date, his Provisional Payee or the estate of the last surviving of the Participant or the Provisional Payee will receive the same monthly payment until a date that is 10 years from the month the Executive Retirement Income was first allocated as part of an initial payment.

If the Participant elects a 50%, 75% or 100% survivor annuity and the Provisional Payee dies while the Participant is in pay status, the unreduced amount will be restored effective the first of the month following the death of the Provisional Payee.

2. Pre-Retirement Survivor Benefit.

A.

Participants Actively on Payroll. A Participant may select one beneficiary to receive a benefit in the event of the Participant’s death subsequent to attaining five years as a Participant in this Supplemental Plan and prior to Separation from Service. A married Participant is presumed to have selected his spouse to receive the benefit unless the spouse provides notarized consent allowing the Participant to name a different beneficiary. An unmarried Participant who has elected a beneficiary under the Pension Plan will have the same beneficiary under this Supplemental Plan unless he elects to file a separate beneficiary form with the Company or the Plan Record Keeper. Payments to the beneficiary will commence the first of the month following the Participant’s death and will be equal to 50% of the Accrued Supplemental Executive Retirement Income which would be payable if the Participant had elected to Separate from Service the first of the month following his date of death adjusted for Early Retirement in accordance with Section V (2). Notwithstanding the above, if a Participant is younger than age 55 at the time of his death, the benefit payable to the beneficiary will be 32.5% of the Accrued Supplemental Early Retirement Income without any further adjustments.

B.

Participants Separating from Service Prior to Age 55. A Participant incurring a Separation from Service prior to age 55 will have a pre-retirement survivor benefit for his spouse for the period of time he is married after Separation from Service. Payments to the spouse will commence the first of the month following the Participant’s death and will be equal to 20% of the Supplemental Executive Retirement. The Supplemental Executive Retirement Income of a Participant will be reduced for any year or portion of a year that this option is elected. The reduction will be .1% for any year or portion of a year the election is in effect from the date the benefit is elected through age 44, plus .3% for any year or portion of a year the benefit is in effect from age 45 through age 54, plus .5% if the benefit is in effect the year the employee attains age 55. With the spouse’s notarized consent the Participant may waive this coverage.

SECTION VII. TERMINATION OF SERVICE

If a Participant included in the Supplemental Plan voluntarily terminates his services prior to age 55 other than in accordance with the terms of an Employment Agreement effective following a Change in Control as defined in the Employment Agreement, the Participant will forfeit all Supplemental Executive Retirement Income except for any amount attributable to Earnings not permitted to be used for benefit calculation under the Pension Plan by the Internal Revenue

8

Code or Regulations thereunder. Any such amount shall be calculated without Preference Service or Incentive Income. A Participant whose services are terminated for any reason prior to attaining five years of actual or disability service following inclusion in this Supplemental Plan shall not be eligible for Supplemental Executive Retirement Income except as provided for in any Employment Agreement which provides for additional Years of Service, Earnings and Incentive Compensation to be used in the calculation of Retirement Income in the event of a Change in Control.

SECTION VIII. FORFEITURE

A Participant who is discharged by the Company for cause, or an employee who is subsequently convicted of any felony committed while in the course of his employment with the Company, which felony involved theft, malicious destruction or misuse of the property of the Company or the embezzlement or misapplication of the funds of the Company, or who makes an admission in writing of the commission of such felony, shall be ineligible for and forfeit all Supplemental Executive Retirement Income.

SECTION IX. NON-ALIENATION OF BENEFITS

No benefit under the Supplemental Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, renunciation, or reduction and any attempt so to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge, renounce, or reduce the same shall be void, nor shall any such benefit be in any manner liable for or subject to the debts, contracts, liabilities, engagements or torts of the person entitled to such benefit.

If any Participant or retired Participant or any Provisional Payee under the Supplemental Plan is adjudicated bankrupt or attempts to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge, renounce, or reduce any benefit under the Supplemental Plan, except as specifically provided in the Supplemental Plan, then such benefit shall cease and terminate and in that event, subject to the requirements of Code Section 409A, the Plan Administrator shall hold or apply the same or any part thereof to or for the benefit of such Participant or retired Participant or Provisional Payee in such manner as the Plan Administrator may think proper, provided the Plan Administrator shall not act in any manner as would perpetuate the alienations prohibited by this Section. Nothing in this provision provides the Plan Administrator any power to accelerate any payments under this Supplemental Plan or to defer any payments under this Supplemental Plan other than in compliance with Code Section 409A and applicable regulations.

9

SECTION X. LIMITATION OF RIGHTS

Neither the establishment of this Supplemental Plan, nor any modification thereto, nor the payment of any benefits, shall be construed as giving to any Participant, other employee, or other person any legal or equitable rights against the Company, or any officer or employee thereof, or the Plan Administrator, except as herein provided. Except as set forth in Section IV, under no circumstances shall the terms of employment of any employee be modified or in any way affected hereby. Inclusion under the Supplemental Plan will not give any Participant or any Provisional Payee any right to claim a Supplemental Executive Retirement Income except to the extent such right is specifically fixed under the terms of the Supplemental Plan. Subject to the provisions of this Supplemental Plan and the Supplemental Executive Retirement Trust the Participant shall have no rights greater than those of a general, unsecured creditor of the Company.

SECTION XI. ADMINISTRATION OF SUPPLEMENTAL PLAN

The general administration of this Supplemental Plan shall be placed in the Plan Administrator provided for in this Supplemental Plan. The determination of the Plan Administrator as to any question or matter arising under this Supplemental Plan shall be conclusive and binding.

The Participant shall file any claim for benefits with the Plan Administrator (EP6-212), One Energy Plaza, Jackson, Michigan 49201. Written notice of any determination will generally be provided within 60 days after the claim is filed. A denial will include an explanation including how to perfect the claim when appropriate. A Participant, or his authorized representative, may appeal such denial of his original claim within 90 days on the notice of denial and may submit additional information and appear before the Plan Administrator for a hearing. A hearing will generally be held within 60 days and a determination 60 days after the hearing. The final determination of the Plan Administrator is required before pursuing other possible remedies. The findings of fact and interpretation of the Plan by the Plan Administrator is final, conclusive and binding on the parties.

SECTION XII. RECOUPMENT

Any benefit under this Plan is also subject to recoupment as required by applicable law.

SECTION XIII. AMENDMENT, MODIFICATION OR
TERMINATION OF THE SUPPLEMENTAL PLAN

This Supplemental Plan may be amended, modified or terminated at any time by action of the Board of Directors of the Company. Notwithstanding any other provisions of this Supplemental Plan, in the event of a Change in Control (as defined in an Employment Agreement between the Participant and CMS Energy Corporation), each such Participant covered under an Employment Agreement shall receive such additional vesting and benefits consistent with the terms of the Employment Agreement. While the Company hopes and expects to continue the Supplemental Plan indefinitely, it reserves the right to terminate or modify it at any time. The Plan Administrator may amend this Supplemental Plan, consistent with the terms of its charter, to comply with any applicable laws, rules or regulations, including Section 409A, to clarify its terms or to provide for administrative requirements. Any amendment or termination will be consistent with Code Section 409A and any applicable amendments or regulations.

10

IN WITNESS WHEREOF, execution is hereby effected this 1st day of April, 2011.

ATTEST:		CMS ENERGY CORPORATION
/s/ Catherine M. Reynolds		/s/ John Russell
Vice President and Secretary		Chief Executive Officer, CMS Energy and Consumers Energy
Date:	April 1, 2011

11

EX-12.1

Exhibit 12.1

CMS ENERGY CORPORATION
Ratio of Earnings to Fixed Charges and Combined Fixed Charges and Preferred Dividends
(Millions of Dollars)

	Three Months Ended						Year Ended December 31
	March 31, 2011			2010			2009		2008			20072			20063
Earnings as defined1
Pretax income from continuing operations	$	210		$	590		$	335	$	440		$	(317	)	$	(434	)
Exclude equity basis subsidiaries		(2	)		(2	)		2		(1	)		(22	)		(14	)
Fixed charges as defined4		110			449			456		429			489			535
Earnings as defined4	$	318		$	1,037		$	793	$	868		$	150		$	87
Fixed charges as defined1
Interest on long-term debt	$	100		$	394		$	383	$	371		$	415		$	492
Estimated interest portion of lease rental		4			16			17		25			23			8
Other interest charges		6			42			58		35			53			37
Fixed charges as defined4	$	110		$	452		$	458	$	431		$	491		$	537
Preferred dividends		—			13			17		17			12			11
Combined fixed charges and preferred dividends	$	110		$	465		$	475	$	448		$	503		$	548
Ratio of earnings to fixed charges		2.89			2.29			1.73		2.01			—			—
Ratio of earnings to combined fixed charges and preferred dividends		2.89			2.23			1.67		1.94			—			—

NOTES:

1	Earnings and fixed charges as defined in instructions for Item 503 of Regulation S-K.
2	For the year ended December 31, 2007, fixed charges exceeded earnings by $341 million and combined fixed charges and preferred dividends exceeded earnings by $353 million. Earnings as defined include $204 million in asset impairment charges and a $279 million charge for an electric sales contract termination.
3	For the year ended December 31, 2006, fixed charges exceeded earnings by $450 million and combined fixed charges and preferred dividends exceeded earnings by $461 million. Earnings as defined include $459 million of asset impairment charges.
4	Preferred dividends of a consolidated subsidiary are included in fixed charges, but excluded from earnings as defined because the amount was not deducted in arriving at pretax income from continuing operations.

EX-12.2

Exhibit 12.2

CONSUMERS ENERGY COMPANY
Ratio of Earnings to Fixed Charges and Combined Fixed Charges and Preferred Dividends
(Millions of Dollars)

	Three Months Ended				Year Ended December 31
	March 31, 2011		2010		2009		2008		2007		2006
Earnings as defined1
Pretax income from continuing operations	$	243	$	688	$	456	$	562	$	437	$	167
Exclude equity basis subsidiaries		—		—		—		—		—		(1	)
Fixed charges as defined		71		296		313		276		293		307
Earnings as defined	$	314	$	984	$	769	$	838	$	730	$	473
Fixed charges as defined1
Interest on long-term debt	$	63	$	246	$	250	$	229	$	236	$	286
Estimated interest portion of lease rental		4		16		17		25		23		8
Other interest charges		4		34		46		22		34		13
Fixed charges as defined	$	71	$	296	$	313	$	276	$	293	$	307
Preferred dividends		—		3		3		3		3		3
Combined fixed charges and preferred dividends	$	71	$	299	$	316	$	279	$	296	$	310
Ratio of earnings to fixed charges		4.42		3.32		2.46		3.04		2.49		1.54
Ratio of earnings to combined fixed charges and preferred dividends		4.42		3.29		2.43		3.00		2.47		1.53

NOTES:

¹ Earnings and fixed charges as defined in instructions for Item 503 of Regulation S-K.

EX-31.1

Exhibit 31.1

CERTIFICATION OF JOHN G. RUSSELL

I, John G. Russell, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of CMS Energy Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

     a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

     a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: April 28, 2011	By:	/s/ John G. Russell
		John G. Russell
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF THOMAS J. WEBB

I, Thomas J. Webb, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of CMS Energy Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

     a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

     a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: April 28, 2011	By:	/s/ Thomas J. Webb
		Thomas J. Webb
		Executive Vice President and Chief Financial Officer

EX-31.3

Exhibit 31.3

CERTIFICATION OF JOHN G. RUSSELL

I, John G. Russell, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Consumers Energy Company;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

     a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

     a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: April 28, 2011	By:	/s/ John G. Russell
		John G. Russell
		President and Chief Executive Officer

EX-31.4

Exhibit 31.4

CERTIFICATION OF THOMAS J. WEBB

I, Thomas J. Webb, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Consumers Energy Company;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

     a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

     a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: April 28, 2011	By:	/s/ Thomas J. Webb
		Thomas J. Webb
		Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of CEO and CFO Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of CMS Energy Corporation (the “Company”) for the quarterly period ended March 31, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), John G. Russell, as President and Chief Executive Officer of the Company, and Thomas J. Webb, as Executive Vice President and Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

     (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ John G. Russell
Name:	John G. Russell
Title:	President and Chief Executive Officer

Date: April 28, 2011

/s/ Thomas J. Webb
Name:	Thomas J. Webb
Title:	Executive Vice President and Chief Financial Officer

Date: April 28, 2011

EX-32.2

Exhibit 32.2

Certification of CEO and CFO Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Consumers Energy Company (the “Company”) for the quarterly period ended March 31, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), John G. Russell, as President and Chief Executive Officer of the Company, and Thomas J. Webb, as Executive Vice President and Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

     (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ John G. Russell
Name:	John G. Russell
Title:	President and Chief Executive Officer

Date: April 28, 2011

/s/ Thomas J. Webb
Name:	Thomas J. Webb
Title:	Executive Vice President and Chief Financial Officer

Date: April 28, 2011