UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31, 2014

OR

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

For the transition period from_____to_____

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

Securities registered pursuant to Section 12(b) of the Act:

		Name of Each Exchange
Registrant	Title of Class	on Which Registered
CMS Energy Corporation	Common Stock, $0.01 par value	New York Stock Exchange
Consumers Energy Company	Cumulative Preferred Stock, $100 par value: $4.50 Series	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

CMS Energy Corporation:  Yes x  No o  Consumers Energy Company:  Yes x  No o

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

CMS Energy Corporation:  Yes o  No x  Consumers Energy Company:  Yes o  No x

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 x  No o  Consumers Energy Company:  Yes x  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 x  No o  Consumers Energy Company:  Yes x  No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

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 x  Accelerated filer o  Non-Accelerated filer o  Smaller reporting company o

(Do not check if a smaller reporting company)

Consumers Energy Company:  Large accelerated filer o  Accelerated filer o  Non-Accelerated filer x  Smaller reporting company o

(Do not check if a smaller reporting company)

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 x  Consumers Energy Company:  Yes o  No x

The aggregate market value of CMS Energy voting and non-voting common equity held by non-affiliates was $8.538 billion for the 274,085,598 CMS Energy Common Stock shares outstanding on June 30, 2014 based on the closing sale price of $31.15 for CMS Energy Common Stock, as reported by the New York Stock Exchange on such date.  There were no shares of Consumers common equity held by non-affiliates as of June 30, 2014.

There were 276,264,146 shares of CMS Energy Common Stock outstanding on January 12, 2015, including 803,551 shares owned by Consumers Energy Company.  On January 12, 2015, CMS Energy held all 84,108,789 outstanding shares of common equity of Consumers.  Documents incorporated by reference in Part III:  CMS Energy’s proxy statement and Consumers’ information statement relating to the 2015 Annual Meeting of Shareholders to be held May 1, 2015.

CMS Energy Corporation

Consumers Energy Company

Annual Reports on Form 10-K to the Securities and Exchange Commission for the Year Ended

December 31, 2014

TABLE OF CONTENTS

		Page
Glossary		3
Filing Format		10
Forward-Looking Statements and Information		10
PART I:
Item 1.	Business	13
Item 1A.	Risk Factors	31
Item 1B.	Unresolved Staff Comments	43
Item 2.	Properties	43
Item 3.	Legal Proceedings	43
Item 4.	Mine Safety Disclosures	43
PART II:
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	44
Item 6.	Selected Financial Data	45
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	45
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 8.	Financial Statements and Supplementary Data	47
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	158
Item 9A.	Controls and Procedures	158
Item 9B.	Other Information	160
PART III:
Item 10.	Directors, Executive Officers and Corporate Governance	160
Item 11.	Executive Compensation	161
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	161
Item 13.	Certain Relationships and Related Transactions, and Director Independence	161
Item 14.	Principal Accountant Fees and Services	161
PART IV:
Item 15.	Exhibits and Financial Statement Schedules	163

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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 Michigan in 2008
ABATE	Association of Businesses Advocating Tariff Equity
ABO	Accumulated benefit obligation; the liabilities of a pension plan based on service and pay to date, which differs from the PBO in that it does not reflect expected future salary increases
AFUDC	Allowance for borrowed and equity funds used during construction
ANR	ANR Pipeline Company, a non-affiliated company
AOCI	Accumulated other comprehensive income (loss)
ARO	Asset retirement obligation
ASU	Financial Accounting Standards Board Accounting Standards Update
Bay Harbor	A residential/commercial real estate area located near Petoskey, Michigan, in which CMS Energy sold its interest in 2002
bcf	Billion cubic feet
Big Rock	Big Rock Point nuclear power plant, formerly owned by Consumers
Btu	British thermal unit
CAIR	The Clean Air Interstate Rule
Cantera Gas Company	Cantera Gas Company LLC, a non-affiliated company, formerly known as CMS Field Services
Cantera Natural Gas, Inc.	Cantera Natural Gas, Inc., a non-affiliated company that purchased CMS Field Services
CAO	Chief Accounting Officer
Cash Balance Pension Plan	Cash balance pension plan of CMS Energy and Consumers
CCR	Coal combustion residual
CEO	Chief Executive Officer

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CERCLA	Comprehensive Environmental Response, Compensation, and Liability Act of 1980
CFO	Chief Financial Officer
city-gate contract	An arrangement made for the point at which a local distribution company physically receives gas from a supplier or pipeline
Clean Air Act	Federal Clean Air Act of 1963, as amended
Clean Water Act	Federal Water Pollution Control Act of 1972, as amended
CMS Capital	CMS Capital, L.L.C., a wholly owned subsidiary of CMS Energy
CMS Energy	CMS Energy Corporation and its consolidated subsidiaries, unless otherwise noted; the parent of Consumers and CMS Enterprises
CMS Enterprises	CMS Enterprises Company, a wholly owned subsidiary of CMS Energy
CMS ERM	CMS Energy Resource Management Company, formerly known as 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 in 2004
Consumers	Consumers Energy Company and its consolidated subsidiaries, unless otherwise noted; a wholly owned subsidiary of CMS Energy
Consumers 2014 Securitization Funding	Consumers 2014 Securitization Funding LLC, a wholly owned consolidated bankruptcy-remote subsidiary of Consumers and special-purpose entity organized for the sole purpose of purchasing and owning Securitization property, issuing Securitization bonds, and pledging its interest in Securitization property to a trustee to collateralize the Securitization bonds

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Consumers Funding	Consumers Funding LLC, a wholly owned consolidated bankruptcy-remote subsidiary of Consumers and special-purpose entity organized for the sole purpose of purchasing and owning Securitization property, issuing Securitization bonds, and pledging its interest in Securitization property to a trustee to collateralize the Securitization bonds
CSAPR	The Cross-State Air Pollution Rule
DB Pension Plan	Defined benefit pension plan of CMS Energy and Consumers, including certain present and former affiliates and subsidiaries
DB SERP	Defined Benefit Supplemental Executive Retirement Plan
DCCP	Defined Company Contribution Plan
DC SERP	Defined Contribution Supplemental Executive Retirement Plan
DIG	Dearborn Industrial Generation, L.L.C., a wholly owned subsidiary of Dearborn Industrial Energy, L.L.C., a wholly owned subsidiary of CMS Energy
Dodd-Frank Act	Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
DOE	U.S. Department of Energy
DTE Electric	DTE Electric Company, a non-affiliated company
DTE Gas	DTE Gas Company, a non-affiliated company
EBITDA	Earnings before interest, taxes, depreciation, and amortization
EGWP	Employer Group Waiver Plan
EnerBank	EnerBank USA, a wholly owned subsidiary of CMS Capital
Entergy	Entergy Corporation, a non-affiliated company
Environmental Mitigation 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
EPA	U.S. Environmental Protection Agency
EPS	Earnings per share
Exchange Act	Securities Exchange Act of 1934
FDIC	Federal Deposit Insurance Corporation

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FERC	The Federal Energy Regulatory Commission
First Mortgage Bond Indenture	The indenture dated as of September 1, 1945 between Consumers and The Bank of New York Mellon, as Trustee, as amended and supplemented
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
FTR	Financial transmission right
GAAP	U.S. Generally Accepted Accounting Principles
GCC	Gas Customer Choice, which allows gas customers to purchase gas from alternative suppliers
GCR	Gas cost recovery
Genesee	Genesee Power Station Limited Partnership, a VIE in which HYDRA-CO Enterprises, Inc., a wholly owned subsidiary of CMS Enterprises, has a 50 percent interest
Grayling	Grayling Generating Station Limited Partnership, a VIE in which HYDRA-CO Enterprises, Inc., a wholly owned subsidiary of CMS Enterprises, has a 50 percent interest
Great Lakes Gas Transmission	Great Lakes Gas Transmission Limited Partnership, a non-affiliated company
GWh	Gigawatt-hour, a unit of energy equal to one billion watt-hours
Health Care Acts	Comprehensive health care reform enacted in 2010, comprising the Patient Protection and Affordable Care Act and the related Health Care and Education Reconciliation Act
IRS	Internal Revenue Service
kilovolts	Thousand volts, a unit used to measure the difference in electrical pressure along a current
kVA	Thousand volt-amperes, a unit used to reflect the electrical power capacity rating of equipment or a system
kWh	Kilowatt-hour, a unit of energy equal to one thousand watt-hours
LIBOR	The London Interbank Offered Rate

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Ludington	Ludington pumped-storage plant, jointly owned by Consumers and DTE Electric
MATS	Mercury and Air Toxics Standards, which limit mercury, acid gases, and other toxic pollution from coal-fueled and oil-fueled power plants
MBT	Michigan Business Tax
mcf	Thousand cubic feet
MCIT	Michigan Corporate Income Tax
MCV Facility	A 1,647 MW natural gas-fueled, combined-cycle cogeneration facility operated by the MCV Partnership
MCV Partnership	Midland Cogeneration Venture Limited Partnership
MCV PPA	PPA between Consumers and the MCV Partnership
MD&A	Management’s Discussion and Analysis of Financial Condition and Results of Operations
MDEQ	Michigan Department of Environmental Quality
MDL	A pending multi-district litigation case in Nevada arising out of several consolidated cases
MGP	Manufactured gas plant
MISO	Midcontinent Independent System Operator, Inc.
mothball	To place a generating unit into a state of extended reserve shutdown in which the unit is inactive and unavailable for service for a specified period, during which the unit can be brought back into service after receiving appropriate notification and completing any necessary maintenance or other work; generation owners in MISO must request approval to mothball a unit, and MISO then evaluates the request for reliability impacts
MPSC	Michigan Public Service Commission
MRV	Market-related value of plan assets
MW	Megawatt, a unit of power equal to one million watts
MWh	Megawatt-hour, a unit of energy equal to one million watt-hours
NAAQS	National Ambient Air Quality Standards
NAV	Net asset value

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NERC	The North American Electric Reliability Corporation, a non-affiliated company responsible for developing and enforcing reliability standards, monitoring the bulk power system, and educating and certifying industry personnel
NOV	Notice of Violation
NPDES	National Pollutant Discharge Elimination System, a permit system for regulating point sources of pollution under the Clean Water Act
NREPA	Part 201 of the 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	The New York Mercantile Exchange
OPEB	Other Post-Employment Benefits
OPEB Plan	Postretirement health care and life insurance plans of CMS Energy and Consumers, including certain present and former affiliates and subsidiaries
Palisades	Palisades nuclear power plant, sold by Consumers to Entergy in 2007
Panhandle	Panhandle Eastern Pipe Line Company, a former wholly owned subsidiary of CMS Gas Transmission
PBO	Projected benefit obligation
PCB	Polychlorinated biphenyl
PISP	Performance Incentive Stock Plan
PPA	Power purchase agreement
PSCR	Power supply cost recovery
PSD	Prevention of Significant Deterioration
REC	Renewable energy credit established under the 2008 Energy Law
ReliabilityFirst Corporation	ReliabilityFirst Corporation, a non-affiliated company responsible for the preservation and enhancement of bulk power system reliability and security
Renewable Operating Permit	Michigan’s Title V permitting program under the Clean Air Act
Resource Conservation and Recovery Act	Federal Resource Conservation and Recovery Act of 1976

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RMRR	Routine maintenance, repair, and replacement
ROA	Retail Open Access, which allows electric generation customers to choose alternative electric suppliers pursuant to a Michigan statute enacted in 2000
S&P	Standard & Poor’s Financial Services LLC
SEC	U.S. Securities and Exchange Commission
Securitization	A financing method authorized by statute and approved by the MPSC which allows a utility to sell its right to receive a portion of the rate payments received from its customers for the repayment of securitization bonds issued by a special-purpose entity affiliated with such utility
Sherman Act	Sherman Antitrust Act of 1890
Smart Energy	Consumers’ Smart Energy grid modernization project, which includes the installation of smart meters that transmit and receive data, a two-way communications network, and modifications to Consumers’ existing information technology system to manage the data and enable changes to key business processes
T.E.S. Filer City	T.E.S. Filer City Station Limited Partnership, a VIE in which HYDRA-CO Enterprises, Inc., a wholly owned subsidiary of CMS Enterprises, has a 50 percent interest
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 non-affiliated company and wholly owned subsidiary of Panhandle
USW	United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO-CLC
UWUA	Utility Workers Union of America, AFL-CIO
VEBA trust	Voluntary employees’ beneficiary association trusts accounts established specifically to set aside employer-contributed assets to pay for future expenses of the OPEB Plan
VIE	Variable interest entity

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FILING FORMAT

This combined Form 10-K is separately filed by CMS Energy and Consumers.  Information in this combined Form 10-K 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, neither Consumers nor any other subsidiary of CMS Energy has any obligation in respect of debt securities of CMS Energy.

FORWARD-LOOKING STATEMENTS AND INFORMATION

This Form 10-K 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, but are not limited to, the following, all of which are potentially significant:

·the impact of new regulation by the MPSC or FERC and other applicable governmental proceedings and regulations, including any associated impact on electric or gas rates or rate structures;

·potentially adverse regulatory treatment or failure to receive timely regulatory orders affecting Consumers that are or could come before the MPSC, FERC, or other governmental authorities;

·changes in the performance of or regulations applicable to MISO, Michigan Electric Transmission Company, pipelines, railroads, vessels, or other service providers that CMS Energy, Consumers, or any of their affiliates rely on to serve their customers;

·the adoption of federal or state laws or regulations or changes in applicable laws, rules, regulations, principles, or practices, or in their interpretation, including those related to energy policy and ROA, gas pipeline safety, the environment, regulation or deregulation, health care reforms (including the Health Care Acts), taxes, accounting matters, climate change, air emissions, potential effects of the Dodd-Frank Act, and other business issues that could have an impact on CMS Energy’s, Consumers’, or any of their affiliates’ businesses or financial results;

·potentially adverse regulatory or legal interpretations or decisions regarding environmental matters, or delayed regulatory treatment or permitting decisions that are or could come before the MDEQ, EPA, and/or U.S. Army Corps of Engineers, 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;

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·changes in energy markets, including availability and price of electric capacity and the timing and extent of changes in commodity prices and availability and deliverability of coal, natural gas, natural gas liquids, electricity, oil, and certain related products;

·the price of CMS Energy common stock, the credit ratings of CMS Energy and Consumers, capital and financial market conditions, and the effect of these market conditions on CMS Energy’s and Consumers’ interest costs and access to the capital markets, including availability of financing to CMS Energy, Consumers, or any of their affiliates;

·the investment performance of the assets of CMS Energy’s and Consumers’ pension and benefit plans, the discount rates used in calculating the plans’ obligations, and the resulting impact on future funding requirements;

·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, ability to collect accounts receivable from customers, or cost and availability of capital;

·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 those in bankruptcy, to meet their obligations to CMS Energy and Consumers;

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

·national, regional, and local economic, competitive, and regulatory policies, conditions, and developments, including municipal bankruptcy filings;

·loss of customer demand for electric generation supply to alternative energy suppliers or to increased use of distributed generation;

·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;

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

·the availability, cost, coverage, and terms of insurance, the stability of insurance providers, and the ability of Consumers to recover the costs of any insurance from customers;

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

·factors affecting development of electric generation projects and gas and electric distribution infrastructure replacement, conversion, and expansion projects, including factors related to project site identification, construction material pricing, schedule delays, availability of qualified construction personnel, permitting, and government approvals;

·factors affecting operations, such as costs and availability of personnel, equipment, and materials, unusual weather conditions, catastrophic weather-related damage, scheduled or unscheduled equipment outages, maintenance or repairs, environmental incidents, equipment failures, and electric transmission and distribution or gas pipeline system constraints;

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·potential disruption to, interruption of, or other impacts on facilities, utility infrastructure, or operations due to accidents, explosions, physical disasters, vandalism, war, or terrorism, and the ability to obtain or maintain insurance coverage for these events;

·changes or disruption in fuel supply, including but not limited to rail or vessel transport of coal and pipeline transport of natural gas;

·potential costs, lost revenues, or other consequences resulting from misappropriation of assets or sensitive information, corruption of data, or operational disruption in connection with a cyber attack or other cyber incident;

·technological developments in energy production, storage, delivery, usage, and metering;

·the ability to implement technology, including Smart Energy, successfully;

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

·adverse consequences resulting from any past, present, 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 any legal or administrative claims, proceedings, investigations, or settlements;

·the reputational impact on CMS Energy and Consumers of operational incidents, violations of corporate compliance policies, regulatory violations, and other business events;

·restrictions imposed by various financing arrangements and regulatory requirements on the ability of Consumers and other subsidiaries of CMS Energy to transfer funds to CMS Energy in the form of cash dividends, loans, or advances;

·earnings volatility resulting from the application of fair value accounting to certain energy commodity contracts or interest rate contracts;

·changes in financial or regulatory accounting principles or policies, including 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 matters that may be disclosed from time to time in CMS Energy’s and Consumers’ SEC filings, or in other publicly issued documents.

All forward-looking statements should be considered in the context of the risk and other factors described above and as detailed from time to time in CMS Energy’s and Consumers’ SEC filings.  For additional details regarding these and other uncertainties, see Item 1A. Risk Factors; Item 8. Financial Statements and Supplementary Data, MD&A — Outlook; and Item 8. Financial Statements and Supplementary Data, Notes to the Consolidated Financial Statements — Note 3, Regulatory Matters and Note 4, Contingencies and Commitments.

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PART I

ITEM 1. BUSINESS

GENERAL

CMS ENERGY

CMS Energy was formed as a corporation in Michigan in 1987 and 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 independent power producer.  Consumers serves individuals and businesses operating in the alternative energy, automotive, chemical, metal, and food products industries, as well as a diversified group of other industries.  CMS Enterprises, through its subsidiaries and equity investments, is engaged primarily in independent power production and owns power generation facilities fueled mostly by natural gas and biomass.

CMS Energy manages its businesses by the nature of services each provides, and operates principally in three business segments:  electric utility, gas utility, and enterprises, its non-utility operations and investments.  Consumers’ consolidated operations account for substantially all of CMS Energy’s total assets, income, and operating revenue.  CMS Energy’s consolidated operating revenue was $7.2 billion in 2014, $6.6 billion in 2013, and $6.3 billion in 2012.

For further information about operating revenue, income, and assets and liabilities attributable to all of CMS Energy’s business segments and operations, see Item 8. Financial Statements and Supplementary Data, CMS Energy’s Selected Financial Information, Consolidated Financial Statements, and Notes to the Consolidated Financial Statements.

CONSUMERS

Consumers has served Michigan customers since 1886.  Consumers was incorporated in Maine in 1910 and became a Michigan corporation in 1968.  Consumers owns and operates electric distribution and generation facilities and gas transmission, storage, and distribution facilities.  It provides electricity and/or natural gas to 6.6 million of Michigan’s 10 million residents.  Consumers’ rates and certain other aspects of its business are subject to the jurisdiction of the MPSC and FERC, as described in “CMS Energy and Consumers Regulation” in this Item 1.

Consumers’ consolidated operating revenue was $6.8 billion in 2014, $6.3 billion in 2013, and $6.0 billion in 2012.  For further information about operating revenue, income, and assets and liabilities attributable to Consumers’ electric and gas utility operations, see Item 8. Financial Statements and Supplementary Data, Consumers’ Selected Financial Information, Consolidated Financial Statements, and Notes to the Consolidated Financial Statements.

Consumers owns its principal properties in fee, except that most electric lines and gas mains are located below public roads or on land owned by others and are accessed by Consumers through easements and other rights.  Almost all of Consumers’ properties are subject to the lien of its First Mortgage Bond Indenture.  For additional information on Consumers’ properties, see Consumers Electric Utility — Electric Utility Properties and Consumers Gas Utility — Gas Utility Properties in the “Business Segments” section of this Item 1.

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In 2014, Consumers served 1.8 million electric customers and 1.7 million gas customers in Michigan’s Lower Peninsula.  Presented in the following map is Consumers’ service territory:

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BUSINESS SEGMENTS

CONSUMERS ELECTRIC UTILITY

Electric Utility Operations:  Consumers’ electric utility operations, which include the generation, purchase, distribution, and sale of electricity, generated operating revenue of $4.4 billion in 2014, $4.2 billion in 2013, and $4.0 billion in 2012.  Consumers’ electric utility customer base consists of a mix of primarily residential, commercial, and diversified industrial customers in Michigan’s Lower Peninsula.

Presented in the following illustration is Consumers’ 2014 electric utility operating revenue of $4.4 billion by customer class:

Consumers’ electric utility operations are not dependent on a single customer, or even a few customers, and the loss of any one or even a few of Consumers’ largest customers is not reasonably likely to have a material adverse effect on Consumers’ financial condition.

In 2014, Consumers’ electric deliveries were 38 billion kWh, which included ROA deliveries of four billion kWh, resulting in net bundled sales of 34 billion kWh.  In 2013, Consumers’ electric deliveries were 37 billion kWh, which included ROA deliveries of four billion kWh, resulting in net bundled sales of 33 billion kWh.

Consumers’ electric utility operations are seasonal.  The consumption of electric energy typically increases in the summer months, due primarily to the use of air conditioners and other cooling equipment.

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Presented in the following illustration are Consumers’ monthly weather-adjusted electric deliveries (deliveries adjusted to reflect normal weather conditions) to its customers, including ROA deliveries, during 2014 and 2013:

Consumers’ 2014 summer peak demand was 7,498 MW, which included ROA demand of 591 MW.  For the 2013-2014 winter period, Consumers’ peak demand was 5,960 MW, which included ROA demand of 452 MW.  As required by MISO reserve margin requirements, Consumers owns or controls, through long-term PPAs and short-term capacity purchases, capacity required to supply its projected firm peak load and necessary reserve margin for summer 2015.

Electric Utility Properties:  Consumers’ distribution system consists of:

·434 miles of high-voltage distribution radial lines operating at 120 kilovolts or above;

·4,261 miles of high-voltage distribution overhead lines operating at 23 kilovolts, 46 kilovolts, and 69 kilovolts;

·18 miles of high-voltage distribution underground lines operating at 23 kilovolts and 46 kilovolts;

·56,022 miles of electric distribution overhead lines;

·10,304 miles of underground distribution lines; and

·substations with an aggregate transformer capacity of 24 million kVA.

Consumers is interconnected to the interstate high-voltage electric transmission system owned by Michigan Electric Transmission Company, LLC, a non-affiliated company, and operated by MISO.  Consumers is also interconnected to neighboring utilities and to other transmission systems.

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Presented in the following table are details about Consumers’ electric generating system at December 31, 2014:

	Number of Units and	2014 Generation Capacity	1	2014 Net Generation
Name and Location (Michigan)	Year Entered Service	(MW)		(GWh)
Coal generation
J.H. Campbell 1 & 2 – West Olive	2 Units, 1962-1967	611		3,525
J.H. Campbell 3 – West Olive2	1 Unit, 1980	751		4,681
B.C. Cobb 4 & 5 – Muskegon3	2 Units, 1956-1957	307		1,889
D.E. Karn 1 & 2 – Essexville	2 Units, 1959-1961	508		2,059
J.C. Weadock 7 & 8 – Essexville3	2 Units, 1955-1958	289		1,711
J.R. Whiting 1-3 – Erie3	3 Units, 1952-1953	317		1,819
Total coal generation		2,783		15,684
Oil/Gas steam generation
B.C. Cobb 1-3 – Muskegon4	3 Units, 1999-2000	-		-
D.E. Karn 3 & 4 – Essexville5	2 Units, 1975-1977	1,204		-
Zeeland (combined cycle) – Zeeland	1 Unit, 2002	520		1,847
Total oil/gas steam generation		1,724		1,847
Hydroelectric
Conventional hydro generation – various locations	35 Units, 1906-1949	77		457
Ludington – Ludington	6 Units, 1973	955	6	(300	)7
Total hydroelectric		1,032		157
Gas/Oil combustion turbine
Various plants – various locations8	11 Units, 1966-1971	38		13
Zeeland (simple cycle) – Zeeland	2 Units, 2001	320		152
Total gas/oil combustion turbine		358		165
Wind generation
Lake Winds® Energy Park – Mason County	56 Turbines, 2012	16		270
Cross Winds® Energy Park – Tuscola County	62 Turbines, 2014	-		21
Total wind generation		16		291
Total owned generation		5,913		18,144
Purchased and interchange power9		2,863	10	17,232	11
Total supply		8,776		35,376
Generation and transmission use/loss				1,759
Total net bundled sales				33,617

1    Represents each plant’s electric generation capacity during the summer months, except for Cross Winds® Energy Park, which began operation in December 2014.

2    Represents Consumers’ share of the capacity of the J.H. Campbell 3 unit, net of the 6.69-percent ownership interest of the Michigan Public Power Agency and Wolverine Power Supply Cooperative, Inc.

3    Consumers plans to retire these seven smaller coal-fueled generating units by April 2016.

4    B.C. Cobb 1-3 were coal-fueled units that were retired and subsequently converted to natural gas-fueled units.  B.C. Cobb 1-3 were placed back into service in the years indicated and mothballed in 2009.  Consumers plans to retire these units by June 2015.

5    D.E. Karn 3 & 4 were mothballed in October 2014.  Consumers plans to return these units to service in June 2015.

6    Represents Consumers’ 51-percent share of the capacity of Ludington.  DTE Electric holds the remaining 49-percent ownership interest.

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7    Represents Consumers’ share of net pumped-storage generation.  The pumped-storage facility consumes electricity to pump water during off-peak hours for storage in order to generate electricity later during peak-demand hours.

8    Includes eight units that were mothballed beginning on various dates between October 2010 and October 2014.

9    Includes purchases from the MISO capacity and energy markets, and long-term PPAs.

10 Includes 1,240 MW of purchased contract capacity from the MCV Facility and 778 MW of purchased contract capacity from Palisades.

11 Includes 2,384 GWh of purchased energy from the MCV Facility and 5,974 GWh of purchased energy from Palisades.

Consumers’ generation capacity is a measure of the maximum electric output that Consumers has available to meet peak load requirements.  As shown in the following illustration, Consumers’ 2014 generation capacity of 8,776 MW, including purchased capacity of 2,863 MW, relied on a variety of fuel sources:

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Electric Utility Supply:  Presented in the following table are the sources of Consumers’ electric supply over the last five years:

									GWh
Years Ended December 31	2014		2013		2012		2011		2010
Owned generation
Coal	15,684		15,951		14,027		15,468		17,879
Gas	2,012		1,415		3,003		1,912		1,043
Renewable energy	748		704		433		425		365
Oil	-		4		6		7		21
Net pumped storage1	(300	)	(371	)	(295	)	(365	)	(366	)
Total owned generation	18,144		17,703		17,174		17,447		18,942
Purchased and interchange power
Purchased renewable energy2	2,366		2,250		1,435		1,587		1,582
Purchased generation – other2	10,073		10,871		13,104		11,087		10,421
Net interchange power3	4,793		3,656		4,151		6,825		6,045
Total purchased and interchange power	17,232		16,777		18,690		19,499		18,048
Total supply	35,376		34,480		35,864		36,946		36,990

1    Represents Consumers’ share of net pumped-storage generation.  The pumped-storage facility consumes electricity to pump water during off-peak hours for storage in order to generate electricity later during peak-demand hours.

2    Includes purchases from long-term PPAs.

3    Includes purchases from the MISO energy market and seasonal purchases.

During 2014, Consumers acquired 49 percent of the electricity it provided to customers through long-term PPAs and the MISO energy market.  Consumers offers its generation into the MISO energy market on a day-ahead and real-time basis and bids for power in the market to serve the demand of its customers.  Consumers is a net purchaser of power and supplements its generation capability with purchases from the MISO energy market to meet its customers’ needs during peak demand periods.

At December 31, 2014, Consumers had unrecognized future commitments (amounts for which, in accordance with GAAP, liabilities have not been recorded on its balance sheet) to purchase capacity and energy under long-term PPAs with various generating plants.  These contracts require monthly capacity payments based on the plants’ availability or deliverability.  The payments for 2015 through 2036 are estimated to total $11.1 billion and, for each of the next five years, range from $1.0 billion to $1.1 billion annually.  These amounts may vary depending on plant availability and fuel costs.  For further information about Consumers’ future capacity and energy purchase obligations, see Item 8. Financial Statements and Supplementary Data, MD&A – Capital Resources and Liquidity and Note 4, Contingencies and Commitments – Contractual Commitments.

During 2014, 44 percent of the energy Consumers provided to customers was generated by its coal-fueled generating units, which burned nine million tons of coal and produced a combined total of 15,684 GWh of electricity.

In order to obtain the coal it needs, Consumers enters into physical coal supply contracts.  At December 31, 2014, Consumers had contracts to purchase coal through 2017; payment obligations under these contracts totaled $178 million.  Most of Consumers’ rail-supplied coal contracts have fixed prices, although some contain market-based pricing.  Consumers’ vessel-supplied coal contracts have fixed base prices that are adjusted monthly to reflect changes to the fuel cost of vessel transportation.  At December 31, 2014, Consumers had 88 percent of its 2015 expected coal requirements under contract, as well as a 36-day supply of coal on hand.

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In conjunction with its coal supply contracts, Consumers leases a fleet of rail cars and has transportation contracts with various companies to provide rail and vessel services for delivery of purchased coal to Consumers’ generating facilities.  Consumers’ coal transportation contracts expire through 2019; payment obligations under these contracts totaled $430 million at December 31, 2014.

During 2014, six percent of the energy Consumers provided to customers was generated by natural gas-fueled generating units, which burned 15 bcf of natural gas and produced a combined total of 2,012 GWh of electricity.

In order to obtain the gas it needs for electric generation fuel, Consumers’ electric utility purchases gas from the market near the time of consumption, at prices that allow it to compete in the electric wholesale market.  For D.E. Karn, units 3 and 4, and the Zeeland plant, Consumers purchases gas from the market and transports the gas to the facilities on a firm basis.  For its smaller combustion turbines, Consumers’ electric utility purchases and transports gas to its facilities as a bundled-rate tariff customer of either the gas utility or DTE Gas.

Presented in the following table is the cost per million Btu of all fuels consumed, which fluctuates with the mix of fuel used.

							Cost Per Million Btu
Years Ended December 31	2014		2013		2012		2011		2010
Coal	$	2.72	$	2.90	$	2.98	$	2.94	$	2.51
Gas	7.19		4.68		3.16		4.95		5.57
Oil	20.16		19.47		19.08		18.55		10.98
Weighted-average fuel cost	$	3.17	$	3.07	$	3.05	$	3.18	$	2.71

Electric Utility Competition:  Consumers’ electric utility business is subject to actual and potential competition from many sources, in both the wholesale and retail markets, as well as in electric generation, electric delivery, and retail services.

A Michigan statute enacted in 2000 allowed electric customers in Consumers’ service territory to buy electric generation service from alternative electric suppliers.  The 2008 Energy Law revised the statute by limiting alternative electric supply to ten percent of Consumers’ weather-adjusted retail sales for the preceding calendar year.  At December 31, 2014, Consumers’ electric deliveries under the ROA program were at the ten-percent limit and alternative electric suppliers were providing 771 MW of electric generation service to 308 ROA customers.

In December 2013, a bill was introduced to the Michigan House of Representatives that, if enacted, would have revised the 2008 Energy Law by removing the ten-percent limit and allowing all of Consumers’ electric customers to take service from an alternative electric supplier.  The bill also proposed to deregulate electric generation service in Michigan within two years.  No action was taken prior to the end of the legislative session on this bill or on a similar bill introduced to the Michigan Senate.  Consumers is unable to predict whether similar bills might be introduced during 2015.

In recent years, the Michigan legislature has conducted hearings on the subject of energy competition.  If the ROA limit were increased or if electric generation service in Michigan were deregulated, it could have a material adverse effect on Consumers’ financial results and operations.

Consumers also has competition or potential competition from:

·industrial customers relocating all or a portion of their production capacity outside of Consumers’ service territory for economic reasons;

·municipalities owning or operating competing electric delivery systems; and

·customer self-generation.

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Consumers addresses this competition by monitoring activity in adjacent geographical areas, by providing non-energy services and value to customers through Consumers’ rates and service, and by offering tariff-based incentives that support economic development.

CONSUMERS GAS UTILITY

Gas Utility Operations:  Consumers’ gas utility operations, which include the purchase, transmission, storage, distribution, and sale of natural gas, generated operating revenue of $2.4 billion in 2014, $2.1 billion in 2013, and $2.0 billion in 2012.  Consumers’ gas utility customer base consists of a mix of primarily residential, commercial, and diversified industrial customers in Michigan’s Lower Peninsula.

Presented in the following illustration is Consumers’ 2014 gas utility operating revenue of $2.4 billion by customer class:

Consumers’ gas utility operations are not dependent on a single customer, or even a few customers, and the loss of any one or even a few of Consumers’ largest customers is not reasonably likely to have a material adverse effect on Consumers’ financial condition.

In 2014, deliveries of natural gas, including off-system transportation deliveries, through Consumers’ pipeline and distribution network, totaled 373 bcf, which included GCC deliveries of 65 bcf.  In 2013, deliveries of natural gas, including off-system transportation deliveries, through Consumers’ pipeline and distribution network, totaled 352 bcf, which included GCC deliveries of 63 bcf.  Consumers’ gas utility operations are seasonal.  Consumers injects natural gas into storage during the summer months for use during the winter months when the demand for natural gas is higher.  Peak demand occurs in the winter due to colder temperatures and the resulting use of natural gas as a heating fuel.  During 2014, 43 percent of the natural gas supplied to all customers during the winter months was supplied from storage.

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Presented in the following illustration are Consumers’ monthly weather-adjusted gas deliveries (deliveries adjusted to reflect normal weather conditions) to its customers, including GCC deliveries, during 2014 and 2013:

Gas Utility Properties:  Consumers’ gas distribution and transmission system consists of:

·27,169 miles of distribution mains;

·1,685 miles of transmission lines;

·seven compressor stations with a total of 168,721 installed and available horsepower; and

·15 gas storage fields with a total storage capacity of 309 bcf and a working gas volume of 151 bcf.

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Gas Utility Supply:  In 2014, Consumers purchased 68 percent of the gas it delivered from U.S. producers and six percent from Canadian producers.  The remaining 26 percent was purchased from authorized GCC suppliers and delivered by Consumers to customers in the GCC program.  Presented in the following illustration are the supply arrangements for the gas Consumers delivered to GCC and GCR customers during 2014:

Firm gas transportation or firm city-gate contracts are those that define a fixed amount, price, and delivery time frame.  Consumers’ firm gas transportation contracts are with ANR, Great Lakes Gas Transmission, Panhandle, and Trunkline.  Under these contracts, Consumers purchases and transports gas to Michigan for ultimate delivery to its customers.  Consumers’ firm gas transportation contracts expire through 2023 and provide for the delivery of 61 percent of Consumers’ total gas supply requirements.  Consumers purchases the balance of its required gas supply under firm city-gate contracts and through authorized suppliers under the GCC program.

Gas Utility Competition:  Competition exists in various aspects of Consumers’ gas utility business.  Competition comes from GCC and from alternative fuels and energy sources, such as propane, oil, and electricity.

ENTERPRISES SEGMENT – NON-UTILITY OPERATIONS AND INVESTMENTS

CMS Energy’s enterprises segment, through various subsidiaries and certain equity investments, is engaged primarily in domestic independent power production and the marketing of independent power production.  The enterprises segment’s operating revenue was $299 million in 2014, $181 million in 2013, and $183 million in 2012.

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Independent Power Production:  At December 31, 2014, CMS Energy had ownership interests in independent power plants totaling 1,135 MW or 1,035 net MW.  (Net MW reflects that portion of the capacity relating to CMS Energy’s ownership interests.)  Presented in the following table are CMS Energy’s interests in independent power plants at December 31, 2014:

			Capacity Under	Energy Under
	Primary	Capacity	Long-Term	Long-Term	Ownership
Location	Fuel Type	(MW)	Contract (%)	Contract (%)	Interest (%)
Dearborn, Michigan	Natural gas	710	34	49	100
Gaylord, Michigan	Natural gas	156	42	-	100
Comstock, Michigan	Natural gas	68	42	-	100
Filer City, Michigan	Coal and biomass	73	100	100	50
Flint, Michigan	Biomass	40	88	88	50
Grayling, Michigan	Biomass	38	92	92	50
New Bern, North Carolina	Biomass	50	100	100	50
Total		1,135

The operating revenue from independent power production was $18 million in 2014, $17 million in 2013, and $16 million in 2012.  CMS Energy’s independent power production business faces competition from generators, marketers and brokers, and utilities marketing power in the wholesale market.

Energy Resource Management:  CMS ERM purchases and sells energy commodities in support of CMS Energy’s generating facilities with a focus on optimizing CMS Energy’s independent power production portfolio.  In 2014, CMS ERM marketed 19 bcf of natural gas and 4,681 GWh of electricity.  Electricity marketed by CMS ERM was generated by independent power production of the enterprises segment and unrelated third parties.  CMS ERM’s operating revenue was $281 million in 2014, $164 million in 2013, and $167 million in 2012.

OTHER BUSINESSES

EnerBank:  EnerBank is a Utah state-chartered, FDIC-insured industrial bank providing unsecured consumer installment loans for financing home improvements.  EnerBank’s operating revenue was $80 million in 2014, $64 million in 2013, and $57 million in 2012.

CMS ENERGY AND CONSUMERS REGULATION

CMS Energy, Consumers, and their subsidiaries are subject to regulation by various federal, state, and local governmental agencies, including those described in the following sections.

FERC

FERC has exercised limited jurisdiction over several independent power plants and exempt wholesale generators in which CMS Enterprises has ownership interests, as well as over CMS ERM, CMS Gas Transmission, and DIG.  FERC’s jurisdiction includes, among other things, acquisitions, operations, disposals of certain assets and facilities, services provided and rates charged, and conduct among affiliates.  FERC also has limited jurisdiction over holding company matters with respect to CMS Energy.  FERC, in connection with NERC and with regional reliability organizations, also regulates generation owners and operators, load serving entities, purchase and sale entities, and others with regard to reliability of the bulk power system.

FERC regulates limited aspects of Consumers’ gas business, principally compliance with FERC capacity release rules, shipping rules, the prohibition against certain buy/sell transactions, and the price-reporting rule.

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FERC also regulates certain aspects of Consumers’ electric operations, including compliance with FERC accounting rules, wholesale and transmission rates, operation of licensed hydroelectric generating plants, transfers of certain facilities, corporate mergers, and issuances of securities.

MPSC

Consumers is subject to the jurisdiction of the MPSC, which regulates public utilities in Michigan with respect to retail utility rates, accounting, utility services, certain facilities, certain asset transfers, corporate mergers, and other matters.

The Michigan Attorney General, ABATE, the MPSC Staff, and certain other parties typically participate in MPSC proceedings concerning Consumers.  The Michigan Attorney General, ABATE, and others often appeal significant MPSC orders.

Rate Proceedings:  For information regarding open rate proceedings, see Item 8. Financial Statements and Supplementary Data, MD&A — Outlook and Notes to the Consolidated Financial Statements — Note 3, Regulatory Matters.

OTHER REGULATION

The U.S. Secretary of Energy regulates imports and exports of natural gas and has delegated various aspects of this jurisdiction to FERC and the DOE’s Office of Fossil Fuels.

The U.S. Department of Transportation Office of Pipeline Safety regulates the safety and security of gas pipelines through the Natural Gas Pipeline Safety Act of 1968 and subsequent laws.

EnerBank is regulated by the Utah Department of Financial Institutions and the FDIC.

ENERGY LEGISLATION

CMS Energy, Consumers, and their subsidiaries are subject to various legislative-driven matters, including Michigan’s 2008 Energy Law.  This law requires that at least ten percent of Consumers’ electric sales volume come from renewable energy sources by the end of 2015, and includes requirements for specific capacity additions.  The 2008 Energy Law also requires Consumers to prepare an energy optimization plan and achieve annual sales reduction targets through at least 2015.  The targets increase annually, with the goal of achieving a 5.6 percent reduction in customers’ electricity use and a 3.9 percent reduction in customers’ natural gas use by December 31, 2015.  The 2008 Energy Law allows electric customers in Consumers’ service territory to buy electric generation service from alternative electric suppliers in an aggregate amount up to ten percent of Consumers’ weather-adjusted retail sales of the preceding calendar year.  For additional information regarding Consumers’ renewable energy and energy optimization plans and electric ROA, see Item 8. Financial Statements and Supplementary Data, MD&A — Outlook.

CMS ENERGY AND CONSUMERS ENVIRONMENTAL COMPLIANCE

CMS Energy, Consumers, and their subsidiaries are subject to various federal, state, and local regulations for environmental quality, including air and water quality, solid waste management, and other matters.  Consumers expects to recover costs to comply with environmental regulations in customer rates, but cannot guarantee this result.  For additional information concerning environmental matters, see Item 1A. Risk Factors and Item 8. Financial Statements and Supplementary Data, Notes to the Consolidated Financial Statements — Note 4, Contingencies and Commitments.

CMS Energy has recorded a significant liability for its subsidiaries’ obligations associated with Bay Harbor and Consumers has recorded a significant liability for its obligations at a number of MGP sites.

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For additional information, see Item 1A. Risk Factors and Item 8. Financial Statements and Supplementary Data, Notes to the Consolidated Financial Statements — Note 4, Contingencies and Commitments.

Air:  Consumers continues to install state-of-the-art emissions control equipment at its electric generating plants.  Consumers estimates that it will incur expenditures of $258 million from 2015 through 2019 to comply with present and future federal and state environmental regulations that will require extensive reductions in nitrogen oxides, sulfur dioxides, particulate matter, and mercury emissions.  Consumers’ estimate may increase if additional or more stringent laws or regulations are adopted or implemented regarding greenhouse gases, including carbon dioxide.

Solid Waste Disposal:  Costs related to the construction, operation, and closure of solid waste disposal facilities for coal ash are significant.  Consumers’ solid waste disposal areas are regulated under Michigan’s solid waste rules.  Consumers has converted all of its fly ash handling systems to dry systems.  All of Consumers’ ash facilities have programs designed to protect the environment and are subject to quarterly MDEQ inspections.  In December 2014, the EPA issued new federal regulations for ash disposal areas.  Consumers’ preliminary estimate of capital expenditures to comply with future regulations relating to ash disposal is $252 million from 2015 through 2019, but this estimate could change significantly.

Water:  Consumers uses substantial amounts of water to operate and cool its electric generating plants.  Water discharge quality is regulated and administered by the MDEQ under the federal NPDES program.  To comply with such regulation, Consumers’ facilities have discharge monitoring programs.  Consumers expects the EPA to issue final federal regulations for wastewater discharges from electric generating plants in 2015.  Consumers’ preliminary estimate of expenditures to comply with these expected regulations is $152 million from 2015 through 2019.

In 2014, the EPA finalized its cooling water intake rule, which requires Consumers to evaluate the biological impact of its cooling water intake systems and ensure that it is using the best technology available to minimize adverse environmental impacts.  Consumers’ preliminary estimate of expenditures to comply with these regulations is $100 million from 2015 through 2019.

CMS Energy retained environmental remediation obligations for the collection and treatment of leachate at Bay Harbor after selling its interests in the development in 2002.  CMS Energy’s estimate of expenditures on long-term liquid disposal and operating and maintenance costs at Bay Harbor is $29 million from 2015 through 2019.

For further information concerning estimated capital expenditures related to air, solid waste disposal, and water see Item 8. Financial Statements and Supplementary Data, MD&A — Outlook, “Consumers Electric Utility Business Outlook and Uncertainties — Electric Environmental Outlook.”

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INSURANCE

CMS Energy and its subsidiaries, including Consumers, maintain insurance coverage generally similar to comparable companies in the same lines of business.  The insurance policies are subject to terms, conditions, limitations, and exclusions that might not fully compensate CMS Energy or Consumers for all losses.  A portion of each loss is generally assumed by CMS Energy or Consumers in the form of deductibles and self-insured retentions that, in some cases, are substantial.  As CMS Energy or Consumers renews its policies, it is possible that some of the present insurance coverage may not be renewed or obtainable on commercially reasonable terms due to restrictive insurance markets.

CMS Energy’s and Consumers’ present insurance program does not cover the risks of certain environmental costs, such as the cleanup of sites owned by CMS Energy or Consumers, or claims for the long-term storage or disposal of pollutants or for air pollution.

EMPLOYEES

Presented in the following table are the number of employees of CMS Energy and Consumers:

December 31	2014	2013	2012
CMS Energy, including Consumers
Full-time employees	7,704	7,736	7,487
Part-time employees	43	45	54
Total employees1	7,747	7,781	7,541
Consumers
Full-time employees	7,369	7,410	7,188
Part-time employees	19	25	33
Total employees2	7,388	7,435	7,221

1Excluding seasonal employees, 7,714 at December 31, 2014, 7,460 at December 31, 2013, and 7,503 at December 31, 2012.

2Excluding seasonal employees, 7,355 at December 31, 2014, 7,114 at December 31, 2013, and 7,183 at December 31, 2012.

Consumers has a seasonal workforce that peaked at 394 employees during 2014, 321 employees during 2013, and 38 employees during 2012.

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CMS ENERGY EXECUTIVE OFFICERS (AS OF FEBRUARY 1, 2015)

Name	Age	Position	Period
John G. Russell	57	President, CEO, and Director of CMS Energy	5/2010 – Present
		President, CEO, and Director of Consumers	5/2010 – Present
		Chairman of the Board, President, CEO, and Director
		of CMS Enterprises	5/2010 – Present
		President and Chief Operating Officer of Consumers	10/2004 – 5/2010
Thomas J. Webb	62	Executive Vice President and CFO of CMS Energy	8/2002 – Present
		Executive Vice President and CFO of Consumers	8/2002 – Present
		Executive Vice President, CFO, and Director of CMS Enterprises	8/2002 – Present
John M. Butler	50	Senior Vice President of CMS Enterprises	9/2006 – Present
		Senior Vice President of CMS Energy	7/2006 – Present
		Senior Vice President of Consumers	7/2006 – Present
David G. Mengebier	57	Senior Vice President and Chief Compliance Officer
		of CMS Energy	11/2006 – Present
		Senior Vice President and Chief Compliance Officer of Consumers	11/2006 – Present
		Senior Vice President of CMS Enterprises	3/2003 – Present
Catherine M. Reynolds	57	Senior Vice President, General Counsel, and Director
		of CMS Enterprises	1/2014 – Present
		Senior Vice President and General Counsel of CMS Energy	10/2013 – Present
		Senior Vice President and General Counsel of Consumers	10/2013 – Present
		Vice President, Deputy General Counsel, and Corporate Secretary
		of CMS Energy	1/2012 – 10/2013
		Vice President, Deputy General Counsel, and Corporate Secretary
		of Consumers	1/2012 – 10/2013
		Vice President and Corporate Secretary of CMS Energy	9/2006 – 1/2012
		Vice President and Corporate Secretary of Consumers	9/2006 – 1/2012
		Vice President and Secretary of CMS Enterprises	9/2006 – 1/2014
Glenn P. Barba	49	Vice President, Controller, and CAO of CMS Enterprises	11/2007 – Present
		Vice President, Controller, and CAO of CMS Energy	2/2003 – Present
		Vice President, Controller, and CAO of Consumers	1/2003 – Present

There are no family relationships among executive officers and directors of CMS Energy.  The term of office of each of the executive officers extends to the first meeting of the Board of Directors of CMS Energy after the next annual election of Directors of CMS Energy (scheduled to be held on May 1, 2015).

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CONSUMERS EXECUTIVE OFFICERS (AS OF FEBRUARY 1, 2015)

Name	Age	Position	Period
John G. Russell	57	President, CEO, and Director of CMS Energy	5/2010 – Present
		President, CEO, and Director of Consumers	5/2010 – Present
		Chairman of the Board, President, CEO, and Director
		of CMS Enterprises	5/2010 – Present
		President and Chief Operating Officer of Consumers	10/2004 – 5/2010
Thomas J. Webb	62	Executive Vice President and CFO of CMS Energy	8/2002 – Present
		Executive Vice President and CFO of Consumers	8/2002 – Present
		Executive Vice President, CFO, and Director of CMS Enterprises	8/2002 – Present
John M. Butler	50	Senior Vice President of CMS Enterprises	9/2006 – Present
		Senior Vice President of CMS Energy	7/2006 – Present
		Senior Vice President of Consumers	7/2006 – Present
David G. Mengebier	57	Senior Vice President and Chief Compliance Officer
		of CMS Energy	11/2006 – Present
		Senior Vice President and Chief Compliance Officer of Consumers	11/2006 – Present
		Senior Vice President of CMS Enterprises	3/2003 – Present
Jackson L. Hanson	58	Senior Vice President of Consumers	5/2010 – Present
		Vice President of Consumers	11/2006 – 5/2010
Daniel J. Malone	54	Senior Vice President of Consumers	5/2010 – Present
		Vice President of Consumers	6/2008 – 5/2010
Catherine M. Reynolds	57	Senior Vice President, General Counsel, and Director
		of CMS Enterprises	1/2014 – Present
		Senior Vice President and General Counsel of CMS Energy	10/2013 – Present
		Senior Vice President and General Counsel of Consumers	10/2013 – Present
		Vice President, Deputy General Counsel, and Corporate Secretary
		of CMS Energy	1/2012 – 10/2013
		Vice President, Deputy General Counsel, and Corporate Secretary
		of Consumers	1/2012 – 10/2013
		Vice President and Corporate Secretary of CMS Energy	9/2006 – 1/2012
		Vice President and Corporate Secretary of Consumers	9/2006 – 1/2012
		Vice President and Secretary of CMS Enterprises	9/2006 – 1/2014
Glenn P. Barba	49	Vice President, Controller, and CAO of CMS Enterprises	11/2007 – Present
		Vice President, Controller, and CAO of CMS Energy	2/2003 – Present
		Vice President, Controller, and CAO of Consumers	1/2003 – Present
Patricia K. Poppe1	46	Vice President of Consumers	1/2011 – Present
Ronn J. Rasmussen	58	Vice President of Consumers	11/2006 – Present

1Prior to joining Consumers, Ms. Poppe was the director of regulated marketing for energy optimization at DTE Energy Company, a non-affiliated diversified energy company.  She also worked as a director of DTE Energy Company’s North Region Power Plants.

There are no family relationships among executive officers and directors of Consumers.  The term of office of each of the executive officers extends to the first meeting of the Board of Directors of Consumers after the next annual election of Directors of Consumers (scheduled to be held on May 1, 2015).

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AVAILABLE INFORMATION

CMS Energy’s internet address is www.cmsenergy.com.  Information contained on CMS Energy’s website is not incorporated herein.  CMS Energy’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act are accessible free of charge on CMS Energy’s website.  These reports are available soon after they are electronically filed with the SEC.  Also on CMS Energy’s website are its:

·Corporate Governance Principles;

·Articles of Incorporation;

·Bylaws; and

·Charters and Codes of Conduct (including the Audit, Compensation and Human Resources, Finance, and Governance and Public Responsibility Committee Charters, as well as the Employee, Boards of Directors, and Third Party Codes of Conduct).

CMS Energy will provide this information in print to any stockholder who requests it.

Any materials CMS Energy files with the SEC may also be read and copied at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549.  Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.  The SEC also maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.  The address is www.sec.gov.

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ITEM 1A. RISK FACTORS

Actual results in future periods for CMS Energy and Consumers could differ materially from historical results and the forward-looking statements contained in this report.  Factors that might cause or contribute to these differences include, but are not limited to, those discussed in the following sections.  CMS Energy’s and Consumers’ businesses are influenced by many factors that are difficult to predict, that involve uncertainties that may materially affect results, and that are often beyond their control.  Additional risks and uncertainties not presently known or that management believes to be immaterial may also adversely affect CMS Energy or Consumers.  The risk factors described in the following sections, as well as the other information included in this report and in other documents filed with the SEC, should be considered carefully before making an investment in securities of CMS Energy or Consumers.  Risk factors of Consumers are also risk factors of CMS Energy.  All of these risk factors are potentially significant.

CMS Energy depends on dividends from its subsidiaries to meet its debt service obligations.

Due to its holding company structure, CMS Energy depends on dividends from its subsidiaries to meet its debt service and other payment obligations.  Consumers’ ability to pay dividends or acquire its own stock from CMS Energy is limited by restrictions contained in Consumers’ preferred stock provisions and potentially by other legal restrictions, such as certain terms in its articles of incorporation and FERC requirements.  If sufficient dividends were not paid to CMS Energy by its subsidiaries, CMS Energy might not be able to generate the funds necessary to fulfill its payment obligations, which could have a material adverse effect on CMS Energy’s liquidity and financial condition.

CMS Energy has indebtedness that could limit its financial flexibility and its ability to meet its debt service obligations.

The level of CMS Energy’s present and future indebtedness could have several important effects on its future operations, including, among others:

·a significant portion of CMS Energy’s cash flow from operations could be dedicated to the payment of principal and interest on its indebtedness and would not be available for other purposes;

·covenants contained in CMS Energy’s existing debt arrangements, which require it to meet certain financial tests, could affect its flexibility in planning for, and reacting to, changes in its business;

·CMS Energy’s ability to obtain additional financing for working capital, capital expenditures, acquisitions, and general corporate and other purposes could become limited;

·CMS Energy could be placed at a competitive disadvantage to its competitors that are less leveraged;

·CMS Energy’s vulnerability to adverse economic and industry conditions could increase; and

·CMS Energy’s future credit ratings could fluctuate.

CMS Energy’s ability to meet its debt service obligations and to reduce its total indebtedness will depend on its future performance, which will be subject to general economic conditions, industry cycles, changes in laws or regulatory decisions, and financial, business, and other factors affecting its operations, many of which are beyond its control.  CMS Energy cannot make assurances that its business will continue to generate sufficient cash flow from operations to service its indebtedness.  If CMS Energy were unable to generate sufficient cash flows from operations, it could be required to sell assets or obtain additional financing.

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CMS Energy and Consumers have financing needs and could be unable to obtain bank financing or access the capital markets.

CMS Energy and Consumers may be subject to liquidity demands under commercial commitments, guarantees, indemnities, letters of credit, and other contingent liabilities.  Consumers’ capital requirements are expected to be substantial over the next several years as it invests in the Smart Energy program, construction or acquisition of power generation, environmental controls, decommissioning of older facilities, conversions and expansions, and other electric and gas infrastructure to upgrade delivery systems.  Those requirements may increase if additional laws or regulations are adopted or implemented.

CMS Energy and Consumers rely on the capital markets, particularly for publicly offered debt, as well as on bank syndications, to meet their financial commitments and short-term liquidity needs if sufficient internal funds are not available from Consumers’ operations and, in the case of CMS Energy, from dividends paid by Consumers and its other subsidiaries.  CMS Energy and Consumers also use letters of credit issued under certain of their revolving credit facilities to support certain operations and investments.

Disruptions in the capital and credit markets as a result of uncertainty, changing or increased regulation, reduced alternatives, or failures of significant financial institutions could adversely affect CMS Energy’s and Consumers’ access to liquidity needed for their businesses.  Consumers’ inability to obtain prior FERC authorization for any securities issuances, including publicly offered debt, as is required under the Federal Power Act, could adversely affect Consumers’ access to liquidity.  Any liquidity disruption could require CMS Energy and Consumers to take measures to conserve cash.  These measures could include deferring capital expenditures, changing CMS Energy’s and Consumers’ commodity purchasing strategy to avoid collateral-posting requirements, and reducing or eliminating future share repurchases, dividend payments, or other discretionary uses of cash.

CMS Energy continues to explore financing opportunities to supplement its financial strategy.  These potential opportunities include refinancing and/or issuing new debt, preferred stock and/or common equity, commercial paper, and bank financing.  Similarly, Consumers may seek funds through the capital markets, commercial lenders, and leasing arrangements.  Entering into new financings is subject in part to capital market receptivity to utility industry securities in general and to CMS Energy’s and Consumers’ securities in particular.  CMS Energy and Consumers cannot guarantee the capital markets’ acceptance of their securities or predict the impact of factors beyond their control, such as actions of rating agencies.  If CMS Energy or Consumers were unable to obtain bank financing or access the capital markets to incur or refinance indebtedness, or were unable to obtain commercially reasonable terms for any financing, this could have a material adverse effect on its liquidity, financial condition, and results of operations.

Certain of CMS Energy’s and Consumers’ securities and those of their affiliates are rated by various credit rating agencies.  Any reduction or withdrawal of one or more of its credit ratings could have a material adverse impact on CMS Energy’s or Consumers’ ability to access capital on acceptable terms and maintain commodity lines of credit, could make its cost of borrowing higher, and could cause CMS Energy or Consumers to reduce capital expenditures.  If it were unable to maintain commodity lines of credit, CMS Energy or Consumers might have to post collateral or make prepayments to certain suppliers under existing contracts.  Further, since Consumers provides dividends to CMS Energy, any adverse developments affecting Consumers that result in a lowering of its credit ratings could have an adverse effect on CMS Energy’s credit ratings.  CMS Energy and Consumers cannot guarantee that any of their present ratings will remain in effect for any given period of time or that a rating will not be lowered or withdrawn entirely by a rating agency.

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There are risks associated with Consumers’ substantial capital investment program planned for the next five years.

Consumers’ planned investments include the Smart Energy program, construction or acquisition of power generation, gas infrastructure, conversions and expansions, environmental controls, decommissioning of older facilities, and other electric and gas investments to upgrade delivery systems.  The success of these capital investments depends on or could be affected by a variety of factors that include, but are not limited to:

·effective pre-acquisition evaluation of asset values, future operating costs, potential environmental and other liabilities, and other factors beyond Consumers’ control;

·effective cost and schedule management of new capital projects;

·availability of qualified construction personnel;

·changes in commodity and other prices;

·governmental approvals and permitting;

·operational performance;

·changes in environmental, legislative and regulatory requirements; and

·regulatory cost recovery.

It is possible that adverse events associated with these factors could have a material adverse effect on Consumers’ liquidity, financial condition, and results of operations.

Changes to ROA could have a material adverse effect on CMS Energy’s and Consumers’ businesses.

The 2008 Energy Law allows electric customers in Consumers’ service territory to buy electric generation service from alternative electric suppliers in an aggregate amount up to ten percent of Consumers’ weather-adjusted retail sales of the preceding calendar year.  Lower natural gas prices due to a large supply of natural gas on the market, coupled with low capacity prices in the electric supply market, are placing increasing competitive pressure on the cost of Consumers’ electric supply.  Presently, Consumers’ electric rates are above the Midwest average, while the ROA level on Consumers’ system is at the ten-percent limit and the proportion of Consumers’ electric deliveries under the ROA program and on the ROA waiting list is 26 percent.  If the ROA limit were increased or if electric generation service in Michigan were deregulated, it could have a material adverse effect on Consumers’ financial results and operations.

CMS Energy and Consumers are subject to rate regulation, which could have an adverse effect on financial results.

CMS Energy and Consumers are subject to rate regulation.  Consumers’ electric and gas rates are set by the MPSC and cannot be increased without regulatory authorization.  Consumers is permitted by the 2008 Energy Law to self-implement rate changes six months after a rate filing with the MPSC, subject to certain limitations.  If a final rate order from the MPSC provides for lower rates than Consumers self-implemented, Consumers must refund the difference, with interest.  Also, the MPSC may delay or deny implementation of a rate increase upon showing of good cause.

In addition, if rate regulators fail to provide timely rate relief, it could have a material adverse effect on Consumers or Consumers’ plans for making significant capital investments.  Regulators seeking to avoid or minimize rate increases could resist raising customer rates sufficiently to permit Consumers to recover the full cost of these investments.  In addition, because certain costs are mandated by state requirements for cost recovery, such as resource additions to meet Michigan’s renewable resource standard, regulators could be more inclined to oppose rate increases for other requested items and investments.  Rate regulators could also face pressure to avoid or limit rate increases for a number of reasons, including an economic downturn in the state or diminishment of Consumers’ customer base.  In addition to its

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potential effects on Consumers’ investment program, any limitation of cost recovery through rates could have a material adverse effect on Consumers’ liquidity, financial condition, and results of operations.

Orders of the MPSC could limit recovery of costs of providing service including, but not limited to, environmental and safety related expenditures for coal-fueled plants and other utility properties, regulatory assets, power supply and natural gas supply costs, operating and maintenance expenses, additional utility-based investments, sunk investment in mothballed or retired generating plants, costs associated with the proposed retirement and decommissioning of facilities, depreciation expense, MISO energy and transmission costs, costs associated with energy efficiency investments and state or federally mandated renewable resource standards, Smart Energy program costs, or expenditures subject to tracking mechanisms.  These orders could also result in adverse regulatory treatment of other matters.  For example, MPSC orders could prevent or curtail Consumers from shutting off non-paying customers, could prevent or curtail Consumers from self-implementing rate changes, could prevent or curtail the implementation of a gas revenue mechanism, or could require Consumers to refund previously self-implemented rates.

FERC authorizes certain subsidiaries of CMS Energy to sell electricity at market-based rates.  Failure of these subsidiaries to maintain this FERC authority could have a material adverse effect on CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations.  Transmission rates are also set by FERC.  FERC orders related to transmission costs could have a material adverse effect on Consumers’ liquidity, financial condition, and results of operations.

The various risks associated with the MPSC and FERC regulation of CMS Energy’s and Consumers’ businesses, which include the risk of adverse decisions in any number of rate or regulatory proceedings before either agency, as well as judicial proceedings challenging any agency decisions, could have a material adverse effect on CMS Energy’s and Consumers’ liquidity, financial condition, investment plans, and results of operations.

Utility regulation, state or federal legislation, and compliance could have a material adverse effect on CMS Energy’s and Consumers’ businesses.

CMS Energy and Consumers are subject to, or affected by, extensive utility regulation and state and federal legislation.  CMS Energy and Consumers believe that they comply with applicable laws and regulations.  If it were determined that they failed to comply, CMS Energy or Consumers could become subject to fines or penalties or be required to implement additional compliance, cleanup, and remediation programs, the cost of which could be material.  Adoption of new laws, rules, regulations, principles, or practices by federal or state agencies, or changes to present laws, rules, regulations, principles, or practices and their interpretations, could have a material adverse effect on CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations.  Furthermore, any state or federal legislation concerning CMS Energy’s or Consumers’ operations could have a similar effect.

Utility regulation could be impacted by various matters, including electric industry restructuring, hydro relicensing, asset reclassification, gas pipeline capacity, new generation facilities or investments, environmental controls, climate change, air emissions, renewable energy, energy policy and ROA, regulation or deregulation, energy capacity standards or markets, reliability, and safety.  CMS Energy and Consumers cannot predict the impact of these matters on their liquidity, financial condition, and results of operations.

Periodic reviews of the values of CMS Energy’s and Consumers’ assets could result in impairment charges.

CMS Energy and Consumers are required by GAAP to review periodically the carrying value of their assets, including those that may be sold.  Market conditions, the operational characteristics of their assets, and other factors could result in recording impairment charges for their assets, which could have an

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adverse effect on their equity and their access to additional financing.  In addition, CMS Energy and Consumers may be required to record impairment charges at the time they sell assets, depending on the sale prices they are able to secure and other factors.

CMS Energy and Consumers could incur substantial costs to comply with environmental requirements.

CMS Energy and Consumers are subject to costly and stringent environmental regulations and expect that environmental laws and regulations will continue to become more stringent and require additional significant capital expenditures for emissions control equipment, CCR disposal and storage, cooling water intake equipment, effluent treatment, and PCB remediation.  Present and reasonably anticipated state and federal environmental statutes and regulations, including but not limited to the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, and CERCLA, will continue to have a material effect on CMS Energy and Consumers.

In 2014, 96 percent of the energy generated by Consumers came from fossil-fuel-fired power plants, with 85 percent coming from coal-fueled power plants.  CMS Enterprises also has interests in fossil-fuel-fired power plants and other types of power plants that produce greenhouse gases.  In June 2014, the EPA published proposed rules pursuant to Section 111(d) of the Clean Air Act to limit carbon dioxide emissions from existing electric generating units, calling the rules the “Clean Power Plan.”  The proposed rules would require a 30 percent nationwide reduction in carbon emissions from existing power plants by 2030 (based on 2005 levels).  Federal environmental laws and rules and international accords and treaties could require CMS Energy and Consumers to install additional equipment for emission controls, purchase carbon emissions allowances, curtail operations, invest in non-fossil-fuel-fired generating capacity, or take other significant steps to manage or lower the emission of greenhouse gases.

The following risks related to climate change and emissions could also have a material adverse impact on CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations:

·litigation originated by third parties against CMS Energy, Consumers, or their subsidiaries due to CMS Energy’s or Consumers’ greenhouse gas or other emissions;

·impairment of CMS Energy’s or Consumers’ reputation due to their greenhouse gas or other emissions and public perception of their response to potential environmental regulations, rules, and legislation; and

·extreme weather conditions, such as severe storms, that may affect customer demand, company operations, or assets.

Consumers plans to retire seven smaller coal-fueled electric generating units by April 2016 and three smaller natural gas-fueled electric generating units by June 2015.  Once the facilities and equipment on these sites are taken out of service, Consumers may encounter previously unknown environmental conditions that will need to be addressed in a timely fashion with state and federal environmental regulators.

Consumers expects to collect fully from its customers, through the ratemaking process, expenditures incurred to comply with environmental regulations, but cannot guarantee this outcome.  If Consumers were unable to recover these expenditures from customers in rates, it could negatively affect CMS Energy’s and/or Consumers’ liquidity, results of operations, and financial condition and CMS Energy and/or Consumers could be required to seek significant additional financing to fund these expenditures.

For additional information regarding compliance with environmental regulations, see Item 1. Business, CMS Energy and Consumers Environmental Compliance and Item 8. Financial Statements and Supplementary Data, MD&A – Outlook, “Consumers Electric Utility Business Outlook and Uncertainties.”

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CMS Energy’s and Consumers’ businesses could be affected adversely by any delay in meeting environmental requirements.

A delay or failure by CMS Energy or Consumers to obtain or maintain any necessary environmental permits, approvals under the MISO tariff, or approvals to satisfy any applicable environmental regulatory requirements or install emission control equipment could:

·prevent the construction of new facilities;

·prevent the continued operation and sale of energy from existing facilities;

·prevent the suspension of operations at existing facilities;

·prevent the modification of existing facilities; or

·result in significant additional costs that could have a material adverse effect on their liquidity, financial condition, and results of operations.

CMS Energy and Consumers expect to incur additional substantial costs related to remediation of legacy environmental sites.

Consumers expects to incur additional substantial costs related to the remediation of its former MGP sites.  Based upon prior MPSC orders, Consumers expects to be able to recover the costs of these cleanup activities through its gas rates, but cannot guarantee that outcome.

In addition, CMS Energy retained environmental remediation obligations for the collection, treatment, and discharge of leachate at Bay Harbor after selling its interests in the development in 2002.  Leachate is produced when water enters into cement kiln dust piles left over from former cement plant operations at the site.  CMS Energy has signed agreements with the EPA and the MDEQ relating to Bay Harbor.  If CMS Energy were unable to meet its commitments under these agreements, or if unanticipated events occurred, CMS Energy could incur additional material costs relating to its Bay Harbor remediation obligations.

Consumers also expects to incur remediation and other response activity costs at a number of other sites under NREPA and CERCLA.  Consumers believes these costs should be recoverable in rates, but cannot guarantee that outcome.

CMS Energy and Consumers could be affected adversely by legacy litigation and retained liabilities.

CMS Energy, CMS MST, CMS Field Services, Cantera Natural Gas, Inc., and Cantera Gas Company were named as defendants in various lawsuits arising as a result of alleged false natural gas price reporting.  Allegations included manipulation of NYMEX natural gas futures and options prices, price-fixing conspiracies, restraint of trade, and artificial inflation of natural gas retail prices in Kansas, Missouri, and Wisconsin.  CMS Energy cannot predict the outcome of the lawsuits or the amount of damages for which CMS Energy may be liable.  It is possible that the outcome in one or more of the lawsuits could have a material adverse effect on CMS Energy’s liquidity, financial condition, and results of operations.

The agreements that CMS Energy and Consumers enter into for the sale of assets customarily include provisions whereby they are required to:

·retain specified preexisting liabilities, such as for taxes, pensions, or environmental conditions;

·indemnify the buyers against specified risks, including the inaccuracy of representations and warranties that CMS Energy and Consumers make; and

·make payments to the buyers depending on the outcome of post-closing adjustments, litigation, audits, or other reviews, including claims resulting from attempts by foreign or domestic governments to assess taxes on past operations or transactions.

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Many of these contingent liabilities can remain open for extended periods of time after the sales are closed.  Depending on the extent to which the buyers might ultimately seek to enforce their rights under these contractual provisions, and the resolution of any disputes concerning them, there could be a material adverse effect on CMS Energy’s or Consumers’ liquidity, financial condition, and results of operations.

In 2002, CMS Energy sold its oil, gas, and methanol investments in Equatorial Guinea.  The government of Equatorial Guinea claims that CMS Energy owes $142 million in taxes, plus significant penalties and interest, in connection with the sale and may proceed to formal arbitration.  CMS Energy is vigorously contesting the claim, and cannot predict the financial impact or outcome of this matter.  It is possible that the outcome of this matter could have a material adverse effect on CMS Energy’s liquidity, financial condition, and results of operations.

CMS Energy’s and Consumers’ energy sales and operations are affected by seasonal factors and varying weather conditions from year to year.

CMS Energy’s and Consumers’ utility operations are seasonal.  The consumption of electric energy typically increases in the summer months, due primarily to the use of air conditioners and other cooling equipment, while peak demand for natural gas occurs in the winter due to colder temperatures and the resulting use of natural gas as heating fuel.  In addition, Consumers’ electric rates, which follow a seasonal rate design, are higher in the summer months than in the remaining months of the year.  Accordingly, CMS Energy’s and Consumers’ overall results may fluctuate substantially on a seasonal basis.  Mild temperatures during the summer cooling season and winter heating season as well as the impact of significant, extreme weather events on Consumers’ system could have a material adverse effect on CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations.

Consumers is exposed to risks related to general economic conditions in its service territories.

Consumers’ electric and gas utility businesses are affected by the economic conditions impacting the customers they serve.  If the Michigan economy becomes sluggish or declines, Consumers could experience reduced demand for electricity or natural gas that could result in decreased earnings and cash flow.  In addition, economic conditions in Consumers’ service territory affect its collections of accounts receivable and levels of lost or stolen gas, which in turn impact its liquidity, financial condition, and results of operations.

CMS Energy and Consumers are subject to information security risks, risks of unauthorized access to their systems, and technology failures.

In the regular course of business, CMS Energy and Consumers handle a range of sensitive security and customer information.  CMS Energy and Consumers are subject to laws and rules issued by various agencies concerning safeguarding and maintaining the confidentiality of this information.  A security breach of CMS Energy’s and Consumers’ information or control systems could involve theft or the inappropriate release of certain types of information, such as confidential customer information or, separately, system operating information.  These events could disrupt operations, subject CMS Energy and Consumers to possible financial liability, damage their reputation and diminish the confidence of customers, and have a material adverse effect on CMS Energy’s and Consumers’ liquidity, financial conditions, and results of operations.

CMS Energy and Consumers operate in a highly regulated industry that requires the continued operation of sophisticated information and control technology systems and network infrastructure.  Despite implementation of security measures, technology systems are vulnerable to being disabled, to failures, to cyber crime, and to unauthorized access.  These events could impact the reliability of electric generation and electric and gas delivery and also subject CMS Energy and Consumers to financial harm.  Cyber crime, which includes the use of malware, computer viruses, and other means for disruption or unauthorized access against companies, including CMS Energy and Consumers, has increased in

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frequency, scope, and potential impact in recent years.  While CMS Energy and Consumers have not been subject to cyber crime incidents that have had a material impact on their operations to date, their security measures in place may be insufficient to prevent a major cyber attack in the future.  If technology systems were to fail or be breached, CMS Energy and Consumers might not be able to fulfill critical business functions, and sensitive confidential and proprietary data could be compromised, which could have a material adverse effect on CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations.

A variety of technological tools and systems, including both company-owned information technology and technological services provided by outside parties, support critical functions.  The failure of these technologies, or the inability of CMS Energy and Consumers to have these technologies supported, updated, expanded, or integrated into other technologies, could hinder their business operations and materially adversely affect their liquidity, financial condition, and results of operations.

CMS Energy’s and Consumers’ businesses have safety risks.

Consumers’ electric and gas delivery systems, power plants, gas infrastructure, wind energy or solar equipment, energy products, and the independent power plants owned in whole or in part by CMS Energy could be involved in incidents, failures, or accidents that result in injury or property loss to customers, employees, or the public.  Although CMS Energy and Consumers have insurance coverage for many potential incidents (subject to deductibles and self-insurance amounts that could be material), depending upon the nature or severity of any incident, failure, or accident, CMS Energy or Consumers could suffer financial loss, reputational damage, and negative repercussions from regulatory agencies or other public authorities.

CMS Energy’s and Consumers’ revenues and results of operations are subject to risks that are beyond their control, including but not limited to natural disasters, terrorist attacks and related acts of war, hostile cyber intrusions, vandalism, and other catastrophic events.

The impact of natural disasters, severe weather, wars, terrorist acts, vandalism, cyber intrusions, pandemics, and other catastrophic events on the facilities and operations of CMS Energy and Consumers could have a material adverse effect on CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations.  These events could result in severe damage to CMS Energy’s and Consumers’ assets beyond what could be recovered through insurance policies and could severely disrupt operations, resulting in loss of service to customers.  There is also a risk that regulators could, after the fact, conclude that Consumers’ preparedness or response to such an event was inadequate and take adverse actions as a result.

CMS Energy and Consumers are exposed to significant reputational risks.

CMS Energy and Consumers could suffer negative impacts to their reputations as a result of operational incidents, violations of corporate compliance policies, regulatory violations, or other events.  This could have a material adverse effect on CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations.  It could also result in negative customer perception and increased regulatory oversight.

The markets for alternative energy and distributed generation could impact financial results.

Technology advances and government incentives and subsidies could reduce or shift the cost of alternative methods of producing electricity, such as fuel cells, microturbines, wind turbines, and solar cells, and could place additional system burdens on CMS Energy and Consumers.  It is also possible that electric customers could reduce their electric consumption significantly through demand-side energy conservation and energy efficiency programs.  Changes in technology could also alter the channels

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through which electric customers buy electricity.  Any of these changes could have a material adverse effect on CMS Energy’s and Consumers’ liquidity, financial condition, or results of operations.

Energy risk management strategies might not be effective in managing fuel and electricity pricing risks, which could result in unanticipated liabilities to CMS Energy and Consumers or increased volatility in their earnings.

Consumers is exposed to changes in market prices for natural gas, coal, electricity, capacity, emission allowances, and RECs.  Prices for these commodities may fluctuate substantially over relatively short periods of time and expose Consumers to price risk.  A substantial portion of Consumers’ operating expenses for its plants consists of the costs of obtaining these commodities.  Consumers manages commodity price risk using established policies and procedures, and it may use various contracts to manage this risk, including swaps, options, futures, and forward contracts.  No assurance can be made that these strategies will be successful in managing Consumers’ pricing risk or that they will not result in net liabilities to Consumers as a result of future volatility in these markets.

Natural gas prices in particular have been historically volatile.  Consumers routinely enters into contracts to mitigate exposure to the risks of demand, market effects of weather, and changes in commodity prices associated with its gas distribution business.  These contracts are executed in conjunction with the GCR mechanism, which is designed to allow Consumers to recover prudently incurred costs associated with those positions.  If the MPSC determined that any of these contracts or related contracting policies were imprudent, recovery of these costs could be disallowed.  Consumers does not always hedge the entire exposure of its operations from commodity price volatility.  Furthermore, the ability to hedge exposure to commodity price volatility depends on liquid commodity markets.  As a result, to the extent the commodity markets are illiquid, Consumers might not be able to execute its risk management strategies, which could result in larger unhedged positions than preferred at a given time.  To the extent that unhedged positions exist, fluctuating commodity prices could have a negative effect on CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations.  Changes in laws that limit Consumers’ ability to hedge could also have a negative effect on CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations.

CMS Energy and Consumers are exposed to credit risk of counterparties with whom they do business.

Adverse economic conditions or financial difficulties experienced by counterparties with whom CMS Energy and Consumers do business could impair the ability of these counterparties to pay for CMS Energy’s and Consumers’ services and/or fulfill their contractual obligations, including performance and payment of damages.  CMS Energy and Consumers depend on these counterparties to remit payments and perform contracted services in a timely fashion.  Any delay or default in payment or performance of contractual obligations could have a material adverse effect on CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations.

Volatility and disruptions in capital and credit markets could have a negative impact on CMS Energy’s and Consumers’ lenders, suppliers, customers, and other counterparties, causing them to fail to meet their obligations.  Adverse economic conditions could also have a negative impact on the loan portfolio of CMS Energy’s banking subsidiary, EnerBank.

Consumers might not be able to obtain an adequate supply of natural gas or coal, which could limit its ability to operate its electric generation facilities or serve its natural gas customers.

Consumers has natural gas and coal supply and transportation contracts in place for the natural gas and coal it requires for its electric generating capacity.  Consumers also has interstate transportation and supply agreements in place to facilitate delivery of natural gas to its customers.  Apart from the contractual and monetary remedies available to Consumers in the event of a counterparty’s failure to perform under any of these contracts, there can be no assurances that the counterparties to these contracts

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will fulfill their obligations to provide natural gas or coal to Consumers.  The counterparties under the agreements could experience financial or operational problems that inhibit their ability to fulfill their obligations to Consumers.  In addition, counterparties under these contracts might not be required to supply natural gas or coal to Consumers under certain circumstances, such as in the event of a natural disaster or severe weather.

If, for its electric generating capacity, Consumers were unable to obtain its natural gas or coal requirements under existing or future natural gas and coal supply and transportation contracts, it could be required to purchase natural gas or coal at higher prices or forced to purchase electricity from higher-cost generating resources in the MISO energy market.  If, for natural gas delivery to its customers, Consumers were unable to obtain its natural gas supply requirements under existing or future natural gas supply and transportation contracts, it could be required to purchase natural gas at higher prices from other sources or implement its natural gas curtailment program filed with the MPSC.  These alternatives could increase Consumers’ working capital requirements and could decrease its revenues.

Market performance and other changes could decrease the value of employee benefit plan assets, which then could require substantial funding.

The performance of the capital markets affects the values of assets that are held in trust to satisfy future obligations under CMS Energy’s and Consumers’ pension and postretirement benefit plans.  CMS Energy and Consumers have significant obligations under these plans and hold significant assets in these trusts.  These assets are subject to market fluctuations and will yield uncertain returns, which could fall below CMS Energy’s and Consumers’ forecasted return rates.  A decline in the market value of the assets or a change in the level of interest rates used to measure the required minimum funding levels could significantly increase the funding requirements of these obligations.  Also, changes in demographics, including an increased number of retirements or changes in life expectancy assumptions, could significantly increase the funding requirements of the obligations related to the pension and postretirement benefit plans.  If CMS Energy and Consumers were unable to manage their pension and postretirement plan assets successfully, it could have a material adverse effect on their liquidity, financial condition, and results of operations.

A work interruption or other union actions could adversely affect Consumers.

Over 40 percent of Consumers’ employees are represented by unions.  If these employees were to engage in a strike, work stoppage, or other slowdown, or if the terms and conditions in labor agreements were renegotiated, Consumers could experience a significant disruption in its operations and higher ongoing labor costs.  Additionally, while Consumers presently has good relationships with the unions representing its employees, Consumers cannot predict the impact of the expiration of union contracts in 2015.

Failure to attract and retain an appropriately qualified workforce could adversely impact CMS Energy’s and Consumers’ results of operations.

The workforce of CMS Energy and Consumers is aging and a number of employees will become eligible to retire within the next few years.  If CMS Energy and Consumers were unable to match skill sets to future needs, they could encounter operating challenges and increased costs.  These challenges could include a lack of resources, loss of knowledge, and delays in skill development.  Additionally, higher costs could result from the use of contractors to replace employees, loss of productivity, and safety incidents.  Failing to train replacement employees adequately and to transfer internal knowledge and expertise could adversely affect CMS Energy’s and Consumers’ ability to manage and operate their businesses.  If CMS Energy and Consumers were unable to attract and retain an appropriately qualified workforce, their results of operations could be affected negatively.

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Unplanned power plant outages could be costly for Consumers.

Unforeseen maintenance of Consumers’ power plants may be required for many reasons, including catastrophic events such as fires, explosions, extreme weather, floods or other acts of God, equipment failure, operator error, or the need to comply with environmental or safety regulations.  When unplanned maintenance work is required on power plants or other equipment, Consumers will not only incur unexpected maintenance expenses, but it may also have to make spot market purchases of replacement electricity that exceed Consumers’ costs of generation or be forced to retire a given unit if the cost or timing of the maintenance is not reasonable and prudent.  Additionally, unplanned maintenance work could reduce the capacity credit Consumers receives from MISO and could cause Consumers to incur additional capacity costs in future years.  If Consumers were unable to recover any of these increased costs in rates, it could have a material adverse effect on Consumers’ liquidity, financial condition, and results of operations.

Changes in taxation as well as the inherent difficulty in quantifying potential tax effects of business decisions could negatively impact CMS Energy’s and Consumers’ results of operations.

CMS Energy and Consumers are required to make judgments regarding the potential tax effects of various financial transactions and results of operations in order to estimate their obligations to taxing authorities.  The tax obligations include income, real estate, sales and use taxes, employment-related taxes, and ongoing issues related to these tax matters.  The judgments include determining reserves for potential adverse outcomes regarding tax positions that have been taken and may be subject to challenge by the IRS and/or other taxing authorities.  Unfavorable settlements of any of the issues related to these reserves or other tax matters at CMS Energy or Consumers could have a material adverse effect on their liquidity, financial condition, and results of operations.

CMS Energy and Consumers are subject to changing tax laws.  Increases in local, state, or federal tax rates or other changes in tax laws could have adverse impacts on their liquidity, financial condition, and results of operations.

CMS Energy and its subsidiaries, including Consumers and EnerBank, must comply with the Dodd-Frank Act and its related regulations, which are subject to change and could involve material costs or affect operations.

In 2010, the Dodd-Frank Act was passed into law.  Congress detailed some significant changes, but the Dodd-Frank Act leaves many details to be determined by regulation and further study.  Regulations that are intended to implement the Dodd-Frank Act have been and are still being adopted by the appropriate agencies.

The Dodd-Frank Act added a new Section 13 to the Bank Holding Company Act.  Known as the Volcker Rule, it generally restricts certain banking entities (such as EnerBank) and their subsidiaries or affiliates from engaging in proprietary trading activities and from owning equity in or sponsoring any private equity or hedge fund.  The statutory effective date of the Volcker Rule was July 2012, but it is subject to certain transition periods and exceptions for “permitted activities.”  In 2013, the Federal Reserve Board issued final regulations clarifying that banks and other financial institutions had until 2015 to conform fully their activities and investments to the requirements.  In December 2014, the Federal Reserve Board issued an order extending to July 2016 the date by which banking entities must comply with the Volcker Rule’s prohibition on owning interests in covered funds and further indicated its intention to grant another extension, in December 2015, of the covered funds deadline to July 2017.  Under the statute, the activities of CMS Energy and its subsidiaries (including EnerBank) are not expected to be materially affected; however, they will be restricted from engaging in proprietary trading, investing in third-party hedge or private equity funds, and sponsoring these funds in the future unless CMS Energy qualifies for an exemption from the rule.  CMS Energy and its subsidiaries are also subject to certain ongoing compliance

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requirements pursuant to the regulations.  CMS Energy cannot predict the full impact of the Volcker Rule on CMS Energy’s or EnerBank’s operations or financial condition.

Furthermore, effective July 2011, all companies that directly or indirectly control an FDIC-insured bank are required to serve as a source of financial strength for that institution.  As a result, CMS Energy could be called upon by the FDIC to infuse additional capital into EnerBank to the extent that EnerBank fails to satisfy its capital requirements.  In addition, CMS Energy is contractually required (i) to make cash capital contributions to EnerBank in the event that EnerBank does not maintain required minimum capital ratios and (ii) to provide EnerBank financial support, in an amount and duration as may be necessary for EnerBank to meet the cash needs of its depositors and other operations.  EnerBank has exceeded these requirements historically and exceeds them as of February 2015.

In addition, the Dodd-Frank Act provides for regulation by the Commodity Futures Trading Commission of certain commodity-related contracts.  Although CMS Energy, Consumers, and CMS ERM qualify for an end-user exception from mandatory clearing of commodity-related swaps, these regulations could affect the ability of these entities to participate in these markets and could add additional regulatory oversight over their contracting activities.

CMS Energy’s and Consumers’ financial statements, including their reported earnings, could be significantly impacted by convergence with International Financial Reporting Standards.

The Financial Accounting Standards Board is making broad changes to GAAP as part of an overall initiative to converge U.S. standards with International Financial Reporting Standards.  These changes could have significant impacts on the financial statements of CMS Energy and Consumers.  Also, the SEC has been considering incorporating International Financial Reporting Standards into the financial reporting system for U.S. registrants.  A transition to International Financial Reporting Standards could significantly impact CMS Energy’s and Consumers’ financial results, since these standards differ from GAAP in many ways.  One of the major differences is the lack of special accounting treatment for regulated activities under International Financial Reporting Standards, which could result in greater earnings volatility for CMS Energy and Consumers.

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ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Descriptions of CMS Energy’s and Consumers’ properties are found in the following sections of Item 1. Business, all of which are incorporated by reference in this Item 2:

·General, “CMS Energy”;

·General, “Consumers”;

·Business Segments, “Consumers Electric Utility – Electric Utility Properties”;

·Business Segments, “Consumers Gas Utility – Gas Utility Properties”; and

·Business Segments, “Enterprises Segment – Non-Utility Operations and Investments – Independent Power Production.”

ITEM 3. LEGAL PROCEEDINGS

For information regarding CMS Energy’s and Consumers’ significant pending administrative and judicial proceedings involving regulatory, operating, transactional, environmental, and other matters, see Item 8. Financial Statements and Supplementary Data, Notes to the Consolidated Financial Statements – Note 3, Regulatory Matters and Note 4, Contingencies and Commitments.

CMS Energy, Consumers, and certain of their affiliates are also parties to routine lawsuits and administrative proceedings incidental to their businesses involving, for example, claims for personal injury and property damage, contractual matters, various taxes, and rates and licensing.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

CMSENERGY

CMS Energy’s common stock is traded on the New York Stock Exchange.  Market prices for CMS Energy’s common stock and related security holder matters are contained in Item 8. Financial Statements and Supplementary Data, MD&A and Notes to the Consolidated Financial Statements – Note 21, Quarterly Financial and Common Stock Information (Unaudited), which are incorporated by reference herein.  At January 12, 2015, the number of registered holders of CMS Energy’s common stock totaled 34,994, based on the number of record holders.  Presented in the following table are CMS Energy’s dividends on its common stock:

				Per Share
Period	February	May	August	November
2014	$   0.270	$   0.270	$  0.270	$   0.270
2013	0.255	0.255	0.255	0.255

Information regarding securities authorized for issuance under equity compensation plans is included in CMS Energy’s definitive proxy statement, which is incorporated by reference herein.  For additional information regarding dividends and dividend restrictions, see Item 8. Financial Statements and Supplementary Data, Notes to the Consolidated Financial Statements – Note 5, Financings and Capitalization.

CONSUMERS

Consumers’ common stock is privately held by its parent, CMS Energy, and does not trade in the public market.  Presented in the following table are Consumers’ cash dividends on its common stock:

				In Millions
Period	February	May	August	November
2014	$      135	$    120	$    120	$   82
2013	93	101	106	106

For additional information regarding dividends and dividend restrictions, see Item 8. Financial Statements and Supplementary Data, Notes to the Consolidated Financial Statements – Note 5, Financings and Capitalization.

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ISSUER REPURCHASES OF EQUITY SECURITIES

Presented in the following table are CMS Energy’s repurchases of equity securities for the three months ended December 31, 2014:

			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
October 1, 2014 to
October 31, 2014	3	$  29.81	-	-
November 1, 2014 to
November 30, 2014	6	32.67	-	-
December 1, 2014 to
December 31, 2014	-	-	-	-
Total	9	$  31.72	-	-

1All of the common shares were repurchased to satisfy the minimum statutory income tax withholding obligation for common shares that have vested under the PISP.  The value of shares repurchased is based on the market price on the vesting date.

UNREGISTERED SALES OF EQUITY SECURITIES

None.

ITEM 6. SELECTED FINANCIAL DATA

Selected financial information for CMS Energy and Consumers is contained in Item 8. Financial Statements and Supplementary Data, Selected Financial Information, which is incorporated by reference herein.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s discussion and analysis of financial condition and results of operations for CMS Energy and Consumers is contained in Item 8. Financial Statements and Supplementary Data, MD&A, which is incorporated by reference herein.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and qualitative disclosures about market risk for CMS Energy and Consumers are contained in Item 8. Financial Statements and Supplementary Data, MD&A – Critical Accounting Policies and Estimates, “Financial and Derivative Instruments and Market Risk Information,” which is incorporated by reference herein.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Financial Statements	Page
Selected Financial Information
CMS Energy	48
Consumers	49
Management’s Discussion and Analysis of Financial Condition and Results of Operations	50
Consolidated Financial Statements
CMS Energy	80
Consumers	90
Notes to the Consolidated Financial Statements	97
Reports of Independent Registered Public Accounting Firm
CMS Energy	156
Consumers	157

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SELECTED FINANCIAL INFORMATION CMSENERGY CORPORATION

			2014	2013	2012	2011	2010
Operating revenue (in millions)		($)	7,179	6,566	6,253	6,503	6,432
Income from equity method investees (in millions)		($)	15	13	17	9	11
Income from continuing operations (in millions)1		($)	479	454	377	415	366
Income (loss) from discontinued operations (in millions)		($)	-	-	7	2	(23	)
Net income available to common stockholders (in millions)		($)	477	452	382	415	324
Average common shares outstanding (in thousands)			270,580	264,511	260,678	250,824	231,473
Earnings from continuing operations per average common share
CMS Energy	- Basic	($)	1.76	1.71	1.43	1.65	1.50
	- Diluted	($)	1.74	1.66	1.39	1.57	1.36
Earnings per average common share
CMS Energy	- Basic	($)	1.76	1.71	1.46	1.66	1.40
	- Diluted	($)	1.74	1.66	1.42	1.58	1.28
Cash provided by operations (in millions)		($)	1,447	1,421	1,241	1,169	959
Capital expenditures, excluding assets placed under capital lease (in millions)		($)	1,577	1,325	1,227	882	821
Total assets (in millions)		($)	19,185	17,416	17,131	16,452	15,616
Long-term debt, excluding current portion (in millions)		($)	8,016	7,101	6,710	6,040	6,448
Non-current portion of capital leases and financing obligation (in millions)		($)	123	138	153	167	188
Cash dividends declared per common share		($)	1.08	1.02	0.96	0.84	0.66
Market price of common stock at year-end		($)	34.75	26.77	24.38	22.08	18.60
Book value per common share at year-end		($)	13.33	12.98	12.09	11.92	11.19
Total employees at year-end			7,747	7,781	7,541	7,754	7,859
Electric Utility Statistics
Sales (billions of kWh)			38	37	38	38	38
Customers (in thousands)			1,793	1,793	1,786	1,791	1,792
Average sales rate per kWh		(¢)	12.04	11.52	10.94	10.80	10.54
Gas Utility Statistics
Sales and transportation deliveries (bcf)			373	352	329	337	317
Customers (in thousands)2			1,733	1,724	1,715	1,713	1,711
Average sales rate per mcf		($)	8.83	8.51	9.55	9.98	10.60

1 Income from continuing operations includes income attributable to noncontrolling interests of $2 million in each of 2014, 2013, 2012, and 2011, and $3 million in 2010.

2 Excludes off-system transportation customers.

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SELECTED FINANCIAL INFORMATION CONSUMERS ENERGY COMPANY

		2014	2013	2012	2011	2010
Operating revenue (in millions)	($)	6,800	6,321	6,013	6,253	6,156
Net income (in millions)	($)	567	534	439	467	434
Net income available to common stockholder (in millions)	($)	565	532	437	465	432
Cash provided by operations (in millions)