Revenue

12 Months Ended

Dec. 31, 2022

Disaggregation of Revenue [Line Items]

Revenue

RevenuePresented in the following tables are the components of operating revenue:

In Millions
Year Ended December 31, 2022	Electric Utility			Gas Utility			NorthStar Clean Energy1			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	5,395		$	2,720		$	—		$	8,115
Other		—			—			205			205
Revenue recognized from contracts with customers		$	5,395		$	2,720		$	205		$	8,320
Leasing income		—			—			240			240
Financing income		10			6			—			16
Consumers alternative-revenue programs		43			14			—			57
Consumers revenues to be refunded		(29)			(8)			—			(37)
Total operating revenue – CMS Energy		$	5,419		$	2,732		$	445		$	8,596
Consumers
Consumers utility revenue
Residential		$	2,523		$	1,879					$	4,402
Commercial		1,733			559						2,292
Industrial		792			75						867
Other		347			207						554
Revenue recognized from contracts with customers		$	5,395		$	2,720					$	8,115
Financing income		10			6						16
Alternative-revenue programs		43			14						57
Revenues to be refunded		(29)			(8)						(37)
Total operating revenue – Consumers		$	5,419		$	2,732					$	8,151

1Amounts represent NorthStar Clean Energy’s operating revenue from independent power production and its sales of energy commodities.

In Millions
Year Ended December 31, 2021	Electric Utility			Gas Utility			NorthStar Clean Energy1			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	4,915		$	2,046		$	—		$	6,961
Other		—			—			114			114
Revenue recognized from contracts with customers		$	4,915		$	2,046		$	114		$	7,075
Leasing income		—			—			194			194
Financing income		10			5			—			15
Consumers alternative-revenue programs		33			12			—			45
Total operating revenue – CMS Energy		$	4,958		$	2,063		$	308		$	7,329
Consumers
Consumers utility revenue
Residential		$	2,402		$	1,396					$	3,798
Commercial		1,573			396						1,969
Industrial		624			54						678
Other		316			200						516
Revenue recognized from contracts with customers		$	4,915		$	2,046					$	6,961
Financing income		10			5						15
Alternative-revenue programs		33			12						45
Total operating revenue – Consumers		$	4,958		$	2,063					$	7,021

1Amounts represent NorthStar Clean Energy’s operating revenue from independent power production and its sales of energy commodities.

In Millions
Year Ended December 31, 2020	Electric Utility			Gas Utility			NorthStar Clean Energy1			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	4,348		$	1,809		$	—		$	6,157
Other		—			—			81			81
Revenue recognized from contracts with customers		$	4,348		$	1,809		$	81		$	6,238
Leasing income		—			—			148			148
Financing income		11			6			—			17
Consumers alternative-revenue programs		29			14			—			43
Consumers revenues to be refunded		(16)			(12)			—			(28)
Total operating revenue – CMS Energy		$	4,372		$	1,817		$	229		$	6,418
Consumers
Consumers utility revenue
Residential		$	2,109		$	1,232					$	3,341
Commercial		1,444			337						1,781
Industrial		570			46						616
Other		225			194						419
Revenue recognized from contracts with customers		$	4,348		$	1,809					$	6,157
Financing income		11			6						17
Alternative-revenue programs		29			14						43
Revenues to be refunded		(16)			(12)						(28)
Total operating revenue – Consumers		$	4,372		$	1,817					$	6,189

1Amounts represent NorthStar Clean Energy’s operating revenue from independent power production and its sales of energy commodities.

Electric and Gas Utilities

Consumers Utility Revenue: Consumers recognizes revenue primarily from the sale of electric and gas utility services at tariff-based rates regulated by the MPSC. Consumers’ customer base consists of a mix of residential, commercial, and diversified industrial customers. Consumers’ tariff-based sales performance obligations are described below.

•Consumers has performance obligations for the service of standing ready to deliver electricity or natural gas to customers, and it satisfies these performance obligations over time. Consumers recognizes revenue at a fixed rate as it provides these services. These arrangements generally do not have fixed terms and remain in effect as long as the customer consumes the utility service. The rates are set by the MPSC through the rate-making process and represent the stand-alone selling price of Consumers’ service to stand ready to deliver.

•Consumers has performance obligations for the service of delivering the commodity of electricity or natural gas to customers, and it satisfies these performance obligations upon delivery. Consumers recognizes revenue at a price per unit of electricity or natural gas delivered, based on the tariffs established by the MPSC. These arrangements generally do not have fixed terms and remain in effect as long as the customer consumes the utility service. The rates are set by the MPSC through the rate-making process and represent the stand-alone selling price of a bundled

product comprising the commodity, electricity or natural gas, and the service of delivering such commodity.

In some instances, Consumers has specific fixed-term contracts with large commercial and industrial customers to provide electricity or gas at certain tariff rates or to provide gas transportation services at contracted rates. The amount of electricity and gas to be delivered under these contracts and the associated future revenue to be received are generally dependent on the customers’ needs. Accordingly, Consumers recognizes revenues at the tariff or contracted rate as electricity or gas is delivered to the customer. Consumers also has other miscellaneous contracts with customers related to pole and other property rentals, appliance service plans, and utility contract work. Generally, these contracts are short term or evergreen in nature.

Accounts Receivable and Unbilled Revenues: Accounts receivable comprise trade receivables and unbilled receivables. CMS Energy and Consumers record their accounts receivable at cost less an allowance for uncollectible accounts. The allowance is increased for uncollectible accounts expense and decreased for account write-offs net of recoveries. CMS Energy and Consumers establish the allowance based on historical losses, management’s assessment of existing economic conditions, customer payment trends, and reasonable and supported forecast information. CMS Energy and Consumers assess late payment fees on trade receivables based on contractual past-due terms established with customers. Accounts are written off when deemed uncollectible, which is generally when they become six months past due.

For the year ended December 31, 2022, CMS Energy and Consumers recorded uncollectible accounts expense of $50 million, which included a commitment to contribute $10 million to directly assist vulnerable customers with utility bills. CMS Energy and Consumers recorded uncollectible accounts expense of $22 million for the year ended December 31, 2021 and $33 million for the year ended December 31, 2020.

Consumers’ customers are billed monthly in cycles having billing dates that do not generally coincide with the end of a calendar month. This results in customers having received electricity or natural gas that they have not been billed for as of the month-end. Consumers estimates its unbilled revenues by applying an average billed rate to total unbilled deliveries for each customer class. Unbilled revenues, which are recorded as accounts receivable and accrued revenue on CMS Energy’s and Consumers’ consolidated balance sheets, were $663 million at December 31, 2022 and $486 million at December 31, 2021.

Alternative‑Revenue Programs: Consumers accounts for its energy waste reduction incentive mechanism and financial compensation mechanism as alternative-revenue programs. Consumers recognizes revenue related to the energy waste reduction incentive as soon as energy savings exceed the annual targets established by the MPSC and recognizes revenue related to the financial compensation mechanism as payments are made on MPSC-approved PPAs. For additional information on these mechanisms, see Note 2, Regulatory Matters.

Under a gas revenue decoupling mechanism authorized by the MPSC, Consumers is allowed to adjust future gas rates for differences between Consumers’ actual weather‑normalized, non‑fuel revenues and the revenues approved by the MPSC. Consumers accounts for this program as an alternative‑revenue program that meets the criteria for recognizing the effects of decoupling adjustments on revenue as gas is delivered.

Consumers does not reclassify revenue from its alternative-revenue program to revenue from contracts with customers at the time the amounts are collected from customers.

Revenues to Be Refunded: In 2020, the MPSC issued an order authorizing Consumers to refund $28 million voluntarily to utility customers. This amount was refunded to customers during 2021 and 2022 in the form of incremental spending above amounts included in rates on various programs.In December 2022, the MPSC issued an order authorizing Consumers to refund $22 million voluntarily to utility customers. Additionally, in the settlement of its 2022 electric rate case, Consumers agreed to refund voluntarily $15 million of 2022 revenues to utility customers through a one-time bill credit. For additional information, see Note 2, Regulatory Matters

Consumers Energy Company

Disaggregation of Revenue [Line Items]

Revenue

RevenuePresented in the following tables are the components of operating revenue:

In Millions
Year Ended December 31, 2022	Electric Utility			Gas Utility			NorthStar Clean Energy1			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	5,395		$	2,720		$	—		$	8,115
Other		—			—			205			205
Revenue recognized from contracts with customers		$	5,395		$	2,720		$	205		$	8,320
Leasing income		—			—			240			240
Financing income		10			6			—			16
Consumers alternative-revenue programs		43			14			—			57
Consumers revenues to be refunded		(29)			(8)			—			(37)
Total operating revenue – CMS Energy		$	5,419		$	2,732		$	445		$	8,596
Consumers
Consumers utility revenue
Residential		$	2,523		$	1,879					$	4,402
Commercial		1,733			559						2,292
Industrial		792			75						867
Other		347			207						554
Revenue recognized from contracts with customers		$	5,395		$	2,720					$	8,115
Financing income		10			6						16
Alternative-revenue programs		43			14						57
Revenues to be refunded		(29)			(8)						(37)
Total operating revenue – Consumers		$	5,419		$	2,732					$	8,151

1Amounts represent NorthStar Clean Energy’s operating revenue from independent power production and its sales of energy commodities.

In Millions
Year Ended December 31, 2021	Electric Utility			Gas Utility			NorthStar Clean Energy1			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	4,915		$	2,046		$	—		$	6,961
Other		—			—			114			114
Revenue recognized from contracts with customers		$	4,915		$	2,046		$	114		$	7,075
Leasing income		—			—			194			194
Financing income		10			5			—			15
Consumers alternative-revenue programs		33			12			—			45
Total operating revenue – CMS Energy		$	4,958		$	2,063		$	308		$	7,329
Consumers
Consumers utility revenue
Residential		$	2,402		$	1,396					$	3,798
Commercial		1,573			396						1,969
Industrial		624			54						678
Other		316			200						516
Revenue recognized from contracts with customers		$	4,915		$	2,046					$	6,961
Financing income		10			5						15
Alternative-revenue programs		33			12						45
Total operating revenue – Consumers		$	4,958		$	2,063					$	7,021

1Amounts represent NorthStar Clean Energy’s operating revenue from independent power production and its sales of energy commodities.

In Millions
Year Ended December 31, 2020	Electric Utility			Gas Utility			NorthStar Clean Energy1			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	4,348		$	1,809		$	—		$	6,157
Other		—			—			81			81
Revenue recognized from contracts with customers		$	4,348		$	1,809		$	81		$	6,238
Leasing income		—			—			148			148
Financing income		11			6			—			17
Consumers alternative-revenue programs		29			14			—			43
Consumers revenues to be refunded		(16)			(12)			—			(28)
Total operating revenue – CMS Energy		$	4,372		$	1,817		$	229		$	6,418
Consumers
Consumers utility revenue
Residential		$	2,109		$	1,232					$	3,341
Commercial		1,444			337						1,781
Industrial		570			46						616
Other		225			194						419
Revenue recognized from contracts with customers		$	4,348		$	1,809					$	6,157
Financing income		11			6						17
Alternative-revenue programs		29			14						43
Revenues to be refunded		(16)			(12)						(28)
Total operating revenue – Consumers		$	4,372		$	1,817					$	6,189

1Amounts represent NorthStar Clean Energy’s operating revenue from independent power production and its sales of energy commodities.

Electric and Gas Utilities

Consumers Utility Revenue: Consumers recognizes revenue primarily from the sale of electric and gas utility services at tariff-based rates regulated by the MPSC. Consumers’ customer base consists of a mix of residential, commercial, and diversified industrial customers. Consumers’ tariff-based sales performance obligations are described below.

•Consumers has performance obligations for the service of standing ready to deliver electricity or natural gas to customers, and it satisfies these performance obligations over time. Consumers recognizes revenue at a fixed rate as it provides these services. These arrangements generally do not have fixed terms and remain in effect as long as the customer consumes the utility service. The rates are set by the MPSC through the rate-making process and represent the stand-alone selling price of Consumers’ service to stand ready to deliver.

•Consumers has performance obligations for the service of delivering the commodity of electricity or natural gas to customers, and it satisfies these performance obligations upon delivery. Consumers recognizes revenue at a price per unit of electricity or natural gas delivered, based on the tariffs established by the MPSC. These arrangements generally do not have fixed terms and remain in effect as long as the customer consumes the utility service. The rates are set by the MPSC through the rate-making process and represent the stand-alone selling price of a bundled

product comprising the commodity, electricity or natural gas, and the service of delivering such commodity.

In some instances, Consumers has specific fixed-term contracts with large commercial and industrial customers to provide electricity or gas at certain tariff rates or to provide gas transportation services at contracted rates. The amount of electricity and gas to be delivered under these contracts and the associated future revenue to be received are generally dependent on the customers’ needs. Accordingly, Consumers recognizes revenues at the tariff or contracted rate as electricity or gas is delivered to the customer. Consumers also has other miscellaneous contracts with customers related to pole and other property rentals, appliance service plans, and utility contract work. Generally, these contracts are short term or evergreen in nature.

Accounts Receivable and Unbilled Revenues: Accounts receivable comprise trade receivables and unbilled receivables. CMS Energy and Consumers record their accounts receivable at cost less an allowance for uncollectible accounts. The allowance is increased for uncollectible accounts expense and decreased for account write-offs net of recoveries. CMS Energy and Consumers establish the allowance based on historical losses, management’s assessment of existing economic conditions, customer payment trends, and reasonable and supported forecast information. CMS Energy and Consumers assess late payment fees on trade receivables based on contractual past-due terms established with customers. Accounts are written off when deemed uncollectible, which is generally when they become six months past due.

For the year ended December 31, 2022, CMS Energy and Consumers recorded uncollectible accounts expense of $50 million, which included a commitment to contribute $10 million to directly assist vulnerable customers with utility bills. CMS Energy and Consumers recorded uncollectible accounts expense of $22 million for the year ended December 31, 2021 and $33 million for the year ended December 31, 2020.

Consumers’ customers are billed monthly in cycles having billing dates that do not generally coincide with the end of a calendar month. This results in customers having received electricity or natural gas that they have not been billed for as of the month-end. Consumers estimates its unbilled revenues by applying an average billed rate to total unbilled deliveries for each customer class. Unbilled revenues, which are recorded as accounts receivable and accrued revenue on CMS Energy’s and Consumers’ consolidated balance sheets, were $663 million at December 31, 2022 and $486 million at December 31, 2021.

Alternative‑Revenue Programs: Consumers accounts for its energy waste reduction incentive mechanism and financial compensation mechanism as alternative-revenue programs. Consumers recognizes revenue related to the energy waste reduction incentive as soon as energy savings exceed the annual targets established by the MPSC and recognizes revenue related to the financial compensation mechanism as payments are made on MPSC-approved PPAs. For additional information on these mechanisms, see Note 2, Regulatory Matters.

Under a gas revenue decoupling mechanism authorized by the MPSC, Consumers is allowed to adjust future gas rates for differences between Consumers’ actual weather‑normalized, non‑fuel revenues and the revenues approved by the MPSC. Consumers accounts for this program as an alternative‑revenue program that meets the criteria for recognizing the effects of decoupling adjustments on revenue as gas is delivered.

Consumers does not reclassify revenue from its alternative-revenue program to revenue from contracts with customers at the time the amounts are collected from customers.

Revenues to Be Refunded: In 2020, the MPSC issued an order authorizing Consumers to refund $28 million voluntarily to utility customers. This amount was refunded to customers during 2021 and 2022 in the form of incremental spending above amounts included in rates on various programs.In December 2022, the MPSC issued an order authorizing Consumers to refund $22 million voluntarily to utility customers. Additionally, in the settlement of its 2022 electric rate case, Consumers agreed to refund voluntarily $15 million of 2022 revenues to utility customers through a one-time bill credit. For additional information, see Note 2, Regulatory Matters