Leases (Tables)

12 Months Ended

Dec. 31, 2022

Leases [Line Items]

Assets and Liabilities of Lessee

Presented in the following table is information about CMS Energy’s and Consumers’ lease right-of-use assets and lease liabilities:

In Millions, Except as Noted
	CMS Energy, including Consumers								Consumers
December 31	2022				2021				2022				2021
Operating leases
Right-of-use assets1		$	31			$	26			$	27			$	22
Lease liabilities
Current lease liabilities2		4				3				4				3
Non-current lease liabilities3		27				25				23				19
Finance leases
Right-of-use assets		82				57				58				57
Lease liabilities4
Current lease liabilities		9				6				9				6
Non-current lease liabilities		68				46				45				46
Weighted-average remaining lease term (in years)
Operating leases		20				23				18				21
Finance leases		18				12				10				12
Weighted-average discount rate
Operating leases		4.0		%		4.0		%		3.9		%		3.9		%
Finance leases5		5.2				1.7				1.6				1.7

1CMS Energy’s and Consumers’ operating right-of-use lease assets are reported as other non‑current assets on their consolidated balance sheets.

2The current portion of CMS Energy’s and Consumers’ operating lease liabilities are reported as other current liabilities on their consolidated balance sheets.

3The non‑current portion of CMS Energy’s and Consumers’ operating lease liabilities are reported as other non‑current liabilities on their consolidated balance sheets.

4Includes related-party lease liabilities of $25 million, of which less than $1 million was current, at December 31, 2022 and 2021.

5This rate excludes the impact of Consumers’ pipeline agreements and long-term PPAs accounted for as finance leases. The required capacity payments under these agreements, when compared to the underlying fair value of the leased assets, result in effective interest rates that exceed market rates for leases with similar terms.

Schedule of Lease Cost

Presented in the following table is a summary of CMS Energy’s and Consumers’ total lease costs:

In Millions
Years Ended December 31	2022			2021
CMS Energy, including Consumers
Operating lease costs		$	6		$	8
Finance lease costs
Amortization of right-of-use assets		12			7
Interest on lease liabilities		14			16
Variable lease costs		93			90
Short-term lease costs		23			22
Total lease costs		$	148		$	143
Consumers
Operating lease costs		$	6		$	8
Finance lease costs
Amortization of right-of-use assets		12			7
Interest on lease liabilities		14			16
Variable lease costs		93			90
Short-term lease costs		22			21
Total lease costs		$	147		$	142

Presented in the following table is supplemental cash flow information related to CMS Energy’s and Consumers’ lease liabilities:

In Millions
Years Ended December 31	2022			2021
CMS Energy, including Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases		$	6		$	8
Cash used in operating activities for finance leases		14			16
Cash used in financing activities for finance leases		13			7
Lease liabilities arising from obtaining right-of-use assets
Operating leases		10			2
Finance leases		36			—
Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases		$	6		$	8
Cash used in operating activities for finance leases		14			16
Cash used in financing activities for finance leases		12			7
Lease liabilities arising from obtaining right-of-use assets
Operating leases		10			2
Finance leases		12			—

Summary of Minimum Annual Rental Commitments

Presented in the following table are the minimum rental commitments under CMS Energy’s and Consumers’ non-cancelable leases:

In Millions
				Finance Leases
December 31, 2022	Operating Leases			Pipelines and PPAs			Other			Total
CMS Energy, including Consumers
2023		$	5		$	15		$	8		$	23
2024		5			13			6			19
2025		3			13			3			16
2026		2			13			4			17
2027		2			13			2			15
2028 and thereafter		31			39			67			106
Total minimum lease payments		$	48		$	106		$	90		$	196
Less discount		17			75			44			119
Present value of minimum lease payments		$	31		$	31		$	46		$	77
Consumers
2023		$	5		$	15		$	7		$	22
2024		4			13			5			18
2025		3			13			2			15
2026		2			13			2			15
2027		1			13			1			14
2028 and thereafter		26			39			8			47
Total minimum lease payments		$	41		$	106		$	25		$	131
Less discount		14			75			2			77
Present value of minimum lease payments		$	27		$	31		$	23		$	54

Summary of Future Payments to be Received

Presented in the following table are the minimum rental payments to be received under CMS Energy’s non‑cancelable operating leases:

In Millions
December 31, 2022
2023	$	43
2024	43
2025	44
2026	18
Total minimum lease payments	$	148

Consumers Energy Company

Leases [Line Items]

Assets and Liabilities of Lessee

Presented in the following table is information about CMS Energy’s and Consumers’ lease right-of-use assets and lease liabilities:

In Millions, Except as Noted
	CMS Energy, including Consumers								Consumers
December 31	2022				2021				2022				2021
Operating leases
Right-of-use assets1		$	31			$	26			$	27			$	22
Lease liabilities
Current lease liabilities2		4				3				4				3
Non-current lease liabilities3		27				25				23				19
Finance leases
Right-of-use assets		82				57				58				57
Lease liabilities4
Current lease liabilities		9				6				9				6
Non-current lease liabilities		68				46				45				46
Weighted-average remaining lease term (in years)
Operating leases		20				23				18				21
Finance leases		18				12				10				12
Weighted-average discount rate
Operating leases		4.0		%		4.0		%		3.9		%		3.9		%
Finance leases5		5.2				1.7				1.6				1.7

1CMS Energy’s and Consumers’ operating right-of-use lease assets are reported as other non‑current assets on their consolidated balance sheets.

2The current portion of CMS Energy’s and Consumers’ operating lease liabilities are reported as other current liabilities on their consolidated balance sheets.

3The non‑current portion of CMS Energy’s and Consumers’ operating lease liabilities are reported as other non‑current liabilities on their consolidated balance sheets.

4Includes related-party lease liabilities of $25 million, of which less than $1 million was current, at December 31, 2022 and 2021.

5This rate excludes the impact of Consumers’ pipeline agreements and long-term PPAs accounted for as finance leases. The required capacity payments under these agreements, when compared to the underlying fair value of the leased assets, result in effective interest rates that exceed market rates for leases with similar terms.

Schedule of Lease Cost

Presented in the following table is a summary of CMS Energy’s and Consumers’ total lease costs:

In Millions
Years Ended December 31	2022			2021
CMS Energy, including Consumers
Operating lease costs		$	6		$	8
Finance lease costs
Amortization of right-of-use assets		12			7
Interest on lease liabilities		14			16
Variable lease costs		93			90
Short-term lease costs		23			22
Total lease costs		$	148		$	143
Consumers
Operating lease costs		$	6		$	8
Finance lease costs
Amortization of right-of-use assets		12			7
Interest on lease liabilities		14			16
Variable lease costs		93			90
Short-term lease costs		22			21
Total lease costs		$	147		$	142

Presented in the following table is supplemental cash flow information related to CMS Energy’s and Consumers’ lease liabilities:

In Millions
Years Ended December 31	2022			2021
CMS Energy, including Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases		$	6		$	8
Cash used in operating activities for finance leases		14			16
Cash used in financing activities for finance leases		13			7
Lease liabilities arising from obtaining right-of-use assets
Operating leases		10			2
Finance leases		36			—
Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases		$	6		$	8
Cash used in operating activities for finance leases		14			16
Cash used in financing activities for finance leases		12			7
Lease liabilities arising from obtaining right-of-use assets
Operating leases		10			2
Finance leases		12			—

Summary of Minimum Annual Rental Commitments

Presented in the following table are the minimum rental commitments under CMS Energy’s and Consumers’ non-cancelable leases:

In Millions
				Finance Leases
December 31, 2022	Operating Leases			Pipelines and PPAs			Other			Total
CMS Energy, including Consumers
2023		$	5		$	15		$	8		$	23
2024		5			13			6			19
2025		3			13			3			16
2026		2			13			4			17
2027		2			13			2			15
2028 and thereafter		31			39			67			106
Total minimum lease payments		$	48		$	106		$	90		$	196
Less discount		17			75			44			119
Present value of minimum lease payments		$	31		$	31		$	46		$	77
Consumers
2023		$	5		$	15		$	7		$	22
2024		4			13			5			18
2025		3			13			2			15
2026		2			13			2			15
2027		1			13			1			14
2028 and thereafter		26			39			8			47
Total minimum lease payments		$	41		$	106		$	25		$	131
Less discount		14			75			2			77
Present value of minimum lease payments		$	27		$	31		$	23		$	54