CMS Energy (CMS) 10-K risk factor changes: FY2020 vs FY2019

CMS [removed: Energy’s] [added: Energy] and [removed: Consumers’ businesses] [added: Consumers] are [removed: influenced by many factors] [added: exposed to a variety of factors, often beyond their control,] that are difficult to [removed: predict,] [added: predict and] that involve uncertainties that may materially [added: adversely] affect [removed: results, and that are often beyond their control.][added: CMS Energy’s or Consumers’ business, liquidity, financial condition, or results of operations.]

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 [removed: obligations, which could have a material adverse effect on CMS Energy’s liquidity and financial condition.][added: obligations.]

[removed: | • |] [added: -] 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 [removed: |]

[removed: | • |] [added: -] 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 [removed: |]

[removed: | • |] [added: -] CMS Energy’s ability to obtain additional financing for working capital, capital expenditures, acquisitions, and general corporate and other purposes could become limited [removed: |]

[removed: | • |] [added: -] CMS Energy could be placed at a competitive disadvantage to its competitors that are less leveraged [removed: |]

[removed: | • |] [added: -] CMS Energy’s vulnerability to adverse economic and industry conditions could increase [removed: |]

[removed: | • |] [added: -] CMS Energy’s future credit ratings could fluctuate [removed: |]

CMS Energy cannot make assurances that its businesses will continue to generate sufficient cash flow from operations to service its [removed: indebtedness.][added: indebtedness, which could require CMS Energy to sell assets or obtain additional financing.]

CMS Energy and Consumers rely on the capital markets, as well as on bank syndications, to meet their financial commitments and short-term liquidity needs [removed: if sufficient internal funds are] not [removed: available from Consumers’ operations and, in the case of CMS Energy, from dividends paid by Consumers and its other subsidiaries.][added: otherwise funded internally.]

Disruptions in the capital and credit [removed: markets as a result of uncertainty, changing or increased regulation,] [added: markets,] or [removed: failures] [added: the inability to obtain required FERC authorization for issuances] of [removed: significant financial institutions] [added: securities including debt,] could adversely affect CMS Energy’s and Consumers’ access to liquidity needed for their businesses.

[removed: These measures] [added: Any liquidity disruption] could [removed: include,] [added: require CMS Energy and Consumers to take measures to conserve cash including,] but [removed: are] not limited to, deferring capital expenditures, changing [removed: CMS Energy’s and Consumers’] commodity purchasing [removed: strategy] [added: strategies] to avoid collateral-posting requirements, and reducing or eliminating future share repurchases, dividend payments, or other discretionary uses of cash.

CMS Energy [removed: continues] [added: and Consumers continue] to explore financing opportunities to supplement [removed: its] [added: their respective] financial [removed: strategy.][added: strategies.]

These potential opportunities include refinancing and/or issuing new debt, [added: issuing CMS Energy] preferred stock and/or common equity, [added: or entering into] commercial paper, [removed: and] bank [removed: financing.][added: financing, and leasing arrangements.]

A 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 increase [removed: its] [added: their] cost of borrowing, and could cause CMS Energy or Consumers to reduce capital expenditures.

If [removed: it] [added: either or both] 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.

Consumers’ planned investments include the construction or acquisition of [removed: power] [added: electric] generation, electric and gas infrastructure, conversions and expansions, environmental controls, electric grid modernization technology, and other electric and gas investments to upgrade delivery systems, as well as decommissioning of older facilities.

[removed: | • |] [added: -] effective pre-acquisition evaluation of asset values, future operating costs, potential environmental and other liabilities, and other factors beyond Consumers’ control [removed: |]

[removed: | • |] [added: -] effective cost and schedule management of new capital projects [removed: |]

[removed: | • |] [added: -] availability of qualified construction personnel [removed: |]

[removed: | • |] [added: -] changes in commodity and other prices [removed: |]

[removed: | • |] [added: -] governmental approvals and permitting [removed: |]

[removed: | • |] [added: -] operational performance [removed: |]

[removed: | • |] [added: -] changes in environmental, legislative, and regulatory requirements [removed: |]

[removed: | • |] [added: -] regulatory cost recovery [removed: |]

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

Michigan law allows electric customers in Consumers’ service territory to buy electric generation service from alternative electric suppliers in an aggregate amount capped at ten [removed: percent,] [added: percent of Consumers’ sales,] with certain exceptions.

[removed: Presently, the] [added: The] proportion of Consumers’ electric deliveries under the ROA program and on the ROA waiting list is [removed: 27] [added: over ten] percent.

If the ROA limit were increased or if electric generation service in Michigan were deregulated, it could have a material adverse effect on [removed: Consumers’ financial results] [added: CMS Energy] and [removed: operations.][added: Consumers.]

For example, MPSC orders could prevent or curtail Consumers from shutting off non‑paying customers or could prevent or [removed: curtail] [added: limit] the implementation of a gas revenue mechanism.

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 [removed: Energy’s and Consumers’ liquidity, financial condition, investment plans,] [added: Energy] and [removed: results of operations.][added: Consumers.]

If it were determined that [removed: they failed to comply,] CMS Energy or Consumers [added: failed to comply with applicable laws and regulations, they] could become subject to fines, penalties, or disallowed costs, or be required to implement additional compliance, cleanup, or remediation programs, the cost of which could be material.

[removed: Adoption] [added: CMS Energy and Consumers cannot predict the impact] of new laws, rules, regulations, principles, or practices by federal or state agencies, or challenges or changes to present laws, rules, regulations, principles, or practices and the interpretation of any adoption or [removed: change, could have a material adverse effect on CMS Energy’s and Consumers’ liquidity, financial condition, and results of][added: change.]

Furthermore, any state or federal legislation concerning CMS Energy’s or Consumers’ operations could [added: also] have a [removed: similar] [added: material adverse] effect.

CMS Energy and Consumers are subject to costly and stringent environmental regulations that will likely require additional significant capital expenditures for [removed: emissions control equipment,] CCR disposal and storage, cooling water intake equipment, effluent treatment, and PCB remediation.

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

[removed: | • |] [added: -] litigation originated by third parties against CMS Energy or Consumers due to CMS Energy’s or Consumers’ greenhouse gas or other emissions or CCR disposal and storage [removed: |]

[removed: | • |] [added: -] 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 [removed: |]

[removed: | • |] [added: -] extreme weather conditions, such as severe storms or flooding, that may affect customer demand, company operations, or assets [removed: |]

Consumers may encounter [removed: previously unknown] environmental conditions that will need to be addressed in a timely fashion with state and federal environmental regulators as facilities and equipment on these sites are taken out of service.

Investment/Financial Risks

CMS Energy may also, from time to time, repurchase (either in open market transactions or through privately negotiated transactions), redeem, or otherwise retire its outstanding debt.

Such activities, if any, will depend on prevailing market conditions, contractual restrictions, and other factors.

The amounts involved may or may not be material.

Industry/Regulatory Risks

Orders of the MPSC could limit recovery of costs of providing service.

CMS Energy and Consumers cannot predict the impact of FERC orders regarding electric system reliability.

financial support, in an amount and duration as may be necessary for EnerBank to meet the cash needs of its depositors and other operations.

- result in significant additional costs

Business/Operations Risks

The COVID-19 pandemic could materially and adversely affect each of CMS Energy’s and Consumers’ business, results of operations, financial condition, capital investment program, liquidity, and cash flows.

The COVID‑19 pandemic has had widespread impacts on people, businesses, economies, and financial markets globally, in the U.S., and in markets where CMS Energy and Consumers conduct business.

Future impacts of the pandemic could include a prolonged reduction in economic activity, extended disruption to supply chains and operations, and reduced availability of labor and productivity.

CMS Energy and Consumers provide essential services, which means that CMS Energy and Consumers must keep employees, who operate facilities or interact with customers, safe and minimize unnecessary risk of exposure to COVID‑19.

CMS Energy and Consumers have taken extra precautions in an effort to protect the health of employees working in the field and in CMS Energy’s and Consumers’ facilities.

CMS Energy and Consumers have also implemented work-from-home policies where possible.

This is an evolving situation; CMS Energy and Consumers will continue to monitor developments and will take additional necessary precautions in order to keep employees, customers, contractors, and communities safe.

The ultimate impact of the COVID‑19 pandemic depends on factors beyond CMS Energy’s and Consumers’ knowledge or control.

Consumers has experienced a decline in electric deliveries to commercial and industrial customers and increased uncollectible accounts.

Over the long term, the pandemic could have numerous and significant adverse effects on CMS Energy and Consumers.

Additionally, EnerBank could experience slower lending growth, higher loan write-offs, and increased loan modifications.

CMS Energy and Consumers cannot predict how the COVID‑19 pandemic will impact CMS Energy and Consumers.

The degree to which COVID‑19 will impact CMS Energy and Consumers will depend in part on future developments, including the severity and duration of the outbreak, actions or inactions that may be taken by governmental authorities, and to what extent and when normal economic and operational conditions can resume.

General Risk Factors

Any delay or default in payment or

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 those discussed in the following sections.

All of these risk factors are potentially significant.

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If CMS Energy were unable to generate sufficient cash flows from operations, it could be required to sell assets or obtain additional financing.

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.

CMS Energy and Consumers also use letters of credit issued under certain of their revolving credit facilities to support certain operations and investments.

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.

Similarly, Consumers may seek funds through the capital

markets, commercial lenders, and leasing arrangements.

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.

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 there are statutory requirements mandating that regulators allow Consumers to recover from customers certain costs, such as resource additions to meet Michigan’s renewable resource standard, energy waste reduction, and environmental compliance, 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 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 waste reduction investments and state or federally mandated renewable resource standards, or expenditures subject to tracking mechanisms.

FERC orders related to transmission costs could have a material adverse effect on Consumers’ liquidity, financial condition, and results of operations.

CMS Energy and Consumers believe that they comply with applicable laws and regulations.

operations.

Utility regulation could be impacted by various matters, such as electric industry restructuring, hydro relicensing, asset reclassification, gas pipeline capacity and gas storage, new generation facilities or investments, transmission charges, environmental controls, climate change, air emissions, renewable energy, energy policy and ROA, distributed generation, battery storage, 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.

FERC orders regarding electric system reliability could have a material adverse effect on CMS Energy’s or Consumers’ liquidity, financial condition, and results of operations.

CMS Energy’s or Consumers’ liquidity, results of operations, and financial condition and CMS Energy or Consumers could be required to seek significant additional financing to fund these expenditures.

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

In addition, certain CMS Energy subsidiaries retained environmental remediation obligations for the collection, treatment, and discharge of leachate at Bay Harbor after selling their 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.

Certain CMS Energy subsidiaries have signed agreements with the EPA and EGLE relating to Bay Harbor.

If these CMS Energy subsidiaries were unable to meet their commitments under these agreements, or if unanticipated events occurred, these CMS Energy subsidiaries could incur additional material costs relating to their Bay Harbor remediation obligations.

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 inaccurate natural gas price reporting.

Remaining allegations include price-fixing conspiracies, restraint of trade, and artificial inflation of natural gas retail prices in Kansas and Wisconsin.

CMS Energy cannot predict the outcome of these lawsuits or the amount of damages for which CMS Energy may be liable.

It is possible that the outcome of the lawsuits could have a material adverse effect on CMS Energy’s liquidity, financial condition, and results of operations.

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.

The impact of natural disasters, severe weather, wars, terrorist acts, vandalism, theft, cyber incidents, 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.

Consumers’ electric utility operations include the generation, purchase, [removed: transmission,] distribution, and sale of electricity, and Consumers’ gas utility operations include the purchase, transmission, storage, distribution, and sale of natural gas.

Consumers’ customer base consists of a mix of [added: primarily] residential, commercial, and diversified industrial customers.

[removed: | • |] [added: -] regulation and regulatory matters [removed: |]

[removed: | • |] [added: -] state and federal legislation [removed: |]

[removed: | • |] [added: -] economic conditions [removed: |]

[removed: | • |] [added: -] weather [removed: |]

[removed: | • |] [added: -] energy commodity prices [removed: |]

[removed: | • |] [added: -] interest rates [removed: |]

[removed: | • |] [added: -] their securities’ credit ratings [removed: |]

[removed: ][added: ]

Over the last ten years, Consumers’ OSHA recordable incident rate has decreased by over [removed: 63] [added: 53] percent.

[removed: | • |] [added: -] replacement of coal-fueled generation and PPAs with [added: a cost-efficient mix of] renewable energy and energy waste reduction and demand response programs [removed: |]

[removed: | • |] [added: -] targeted infrastructure investment to [added: reduce maintenance costs and] improve reliability and safety [removed: and to reduce maintenance costs |]

[removed: | • |] [added: -] information and control system efficiencies [removed: |]

[removed: | • |] [added: -] employee and retiree health care cost sharing [removed: |]

[removed: | • |] [added: -] workforce productivity enhancements [removed: |]

In addition, Consumers’ gas commodity costs declined by [removed: 62] [added: 66] percent from [removed: 2009] [added: 2010] through [removed: 2019,] [added: 2020,] due not only to a decrease in market prices but also to Consumers’ improvements to its gas infrastructure and optimization of its gas purchasing and storage strategy.

[added: Management considers climate change] and other environmental risks in the companies’ strategy development, business planning, and enterprise risk management processes.

[removed: | • |] [added: -] decreased their combined percentage of electric supply (self-generated and purchased) from coal by [removed: 18] [added: 21] percentage points since 2015 [removed: |]

[removed: | • |] [added: -] reduced carbon dioxide emissions by over 35 percent since 2005 [removed: |]

[removed: | • |] [added: -] reduced the amount of water used to generate electricity by [removed: 31] [added: over 30] percent since 2012 [removed: |]

[removed: | • |] [added: -] reduced landfill waste disposal by over [removed: 1.3] [added: 1.5] million tons since 1992 [removed: |]

[removed: | • |] [added: -] reduced methane emissions by 17 percent since 2012 [removed: |]

[removed: ][added: ]

[removed: | • |] [added: -] raised the renewable energy standard to 12.5 percent in 2019 and 15 percent in 2021; Consumers met the 12.5-percent requirement in 2019 [added: and 2020] with a combination of newly generated RECs and previously generated RECs carried over from prior years [removed: |]

[removed: | • |] [added: -] established a goal of 35 percent combined renewable energy and energy waste reduction by 2025; Consumers has achieved [removed: 22] [added: 25] percent [removed: of the] combined renewable energy and energy waste reduction [removed: goal] through [removed: 2019 |][added: 2020]

[removed: | • |] [added: -] authorized incentives for demand response programs and expanded existing incentives for energy efficiency programs, referring to the combined initiatives as energy waste reduction programs [removed: |]

[removed: | • |] [added: -] established an integrated planning process for new generation resources [removed: |]

[removed: Consumers filed an IRP with] [added: In 2019,] the MPSC [added: approved the IRP that Consumers filed] in [removed: June] 2018, [removed: detailing] [added: which details] its Clean Energy Plan.

[removed: Through its Clean Energy Plan,] Consumers expects to reduce carbon emissions of its owned generation by more than 90 percent from its 2005 levels by [removed: 2040.][added: 2040 through execution of its Clean Energy Plan.]

[removed: Additionally, the plan] [added: The Clean Energy Plan] will [added: also] allow Consumers to achieve a breakthrough goal of at least 50 percent combined renewable energy and energy waste reduction by 2030.

Presented in the following illustration is Consumers’ [removed: 2019] [added: 2020] capacity portfolio and its future capacity portfolio as projected in the IRP.

[removed: ][added: ]

In [removed: October] 2019, Consumers [added: released its Methane Reduction Plan, which] set a goal of net-zero methane emissions from its natural gas delivery system by 2030.

[removed: Consumers’] [added: In 2019, Consumers released its] Methane Reduction Plan, [removed: released in November 2019, outlines its plan to reach this] [added: which set a goal of] net-zero [added: methane] emissions [removed: goal.][added: from its natural gas delivery system by 2030.]

The remaining emissions will be [removed: eliminated] [added: offset] by purchasing and/or producing renewable natural gas.

[removed: | • |] [added: -] to reduce its water use by one billion gallons; [removed: during 2018 and 2019,] [added: since 2017,] Consumers reduced its water usage by over [removed: 400] [added: 880] million gallons [removed: |][added: cumulatively]

[removed: | • |] [added: -] to reduce the amount of waste taken to landfills by 35 percent; [removed: during 2018 and 2019,] [added: compared to 2017,] Consumers reduced its waste to landfills by [removed: 10] [added: 54] percent [removed: |][added: in 2020]

[removed: | • |] [added: -] to enhance, restore, or protect 5,000 acres of land; [removed: during 2018 and 2019,] [added: since 2017,] Consumers enhanced, restored, or protected over [removed: 2,200] [added: 4,600] acres of land [removed: |][added: cumulatively]

CMS Energy, through [removed: its non‑utility businesses,] [added: CMS Enterprises,] continues to pursue further opportunities for the development of renewable generation projects.

EnerBank provides primarily unsecured, fixed-rate installment loans throughout the U.S. to finance home improvements.

COVID-19 Pandemic

CMS Energy and Consumers continue to respond to the public health emergency caused by the COVID‑19 pandemic by instituting and maintaining measures consistent with guidance provided by local, state, and federal agencies.

CMS Energy and Consumers maintain over 60 departmental business continuity plans; these plans were reviewed and enhanced in early 2020 to ensure readiness for the COVID-19 pandemic.

CMS Energy and Consumers continue to take steps to protect the safety of employees, customers, and contractors, and have executed their business continuity plans to ensure the continued delivery of critical energy services.

Additionally, CMS Energy and Consumers have mitigated the potential impact of the pandemic on their liquidity by completing financing transactions and reducing the need for additional external funding.

The COVID‑19 pandemic is a continually evolving situation.

As a result of the pandemic, Consumers has experienced a decline in electric deliveries to commercial and industrial customers, offset partially by an increase in deliveries to residential customers.

It has also experienced increased uncollectible accounts and workforce-related expenses, among other cost increases directly attributable to the pandemic.

Consumers anticipates that these trends will continue in the near term.

In April 2020, the MPSC issued an

order authorizing Consumers to defer incremental uncollectible accounts expense associated with the pandemic.

Additionally, EnerBank anticipates it could experience slower lending growth, higher loan write-offs, and increased loan modifications in the future as a result of the pandemic.

The companies cannot predict the long-term impact of the pandemic on their business, results of operations, financial condition, capital investment program, liquidity, and cash flows.

More detailed discussion of the near-term impacts of and future uncertainties related to the COVID‑19 pandemic can be found in Item 1A.

Risk Factors and throughout this Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

In response to the COVID-19 pandemic, CMS Energy and Consumers have issued a response plan that is focused on the health, safety, and well-being of their co-workers, customers, and communities.

CMS Energy and Consumers have aligned with safety and health guidelines from the CDC, OSHA, and the Michigan Department of Health and Human Services in order to protect their employees, customers,

and contractors to ensure the continued delivery of critical energy services.

To align with, and in addition to, these guidelines, CMS Energy and Consumers have:

- secured the supply chain necessary to provide front-line workers with appropriate personal protective equipment and cleaning supplies

- worked with local health departments and hospital systems to begin administering vaccinations to essential front-line employees

- when necessary, sequestered employees with critical roles at generating plants, gas compression facilities, and electric control rooms

- implemented a paid self-quarantine requirement for employees who are exhibiting symptoms of COVID-19 or who have come into contact with a person suspected to have COVID-19

- prohibited business-related international travel and instituted a mandatory ten-day work remote period for employees who return from personal travel to heavily impacted areas

- required employees to work remotely when possible

- when necessary, reduced service at 13 direct payment offices to drop box and drive-through services only

- initially adjusted work to focus on emergent and critical activities such as electric outages, gas leaks, and other public safety and reliability work; as work restrictions have gradually lifted in Michigan, the companies have resumed normal work with safety measures in place

- contracted a chief medical officer to guide the companies’ response and provide rapid support and supplies for the workforce

- limited access to company facilities, enhanced cleaning protocols, and established a mask-wearing policy

- offered additional paid leave to employees to alleviate child care-related burdens and implemented other interim workforce policies to offer flexibility and reduce employee concerns

In response to the pandemic, CMS Energy and Consumers initially suspended shut-offs of service for non-payment and extended payment protection plans for low-income and senior customers.

CMS Energy and Consumers slowly began resuming shut-offs of service for non-payment in late July 2020 for commercial and industrial customers and in October 2020 for residential customers.

CMS Energy and Consumers remain committed to assisting customers impacted by the pandemic.

During 2020, Consumers provided $12 million to help Michigan residents and small businesses who had experienced difficulty paying their energy bill due to the pandemic.

Additionally, in December 2020, Consumers donated another $3 million to agencies that provide energy bill assistance to low-income households.

- supply chain optimization

In February 2020, Consumers announced a goal of achieving net-zero carbon emissions from its electric business by 2040.

This goal includes not only emissions from Consumers’ owned generation, but also emissions from the generation of power purchased through long-term PPAs and from the MISO energy market.

EnerBank provides unsecured consumer installment loans, largely for financing home improvements.

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Management considers climate change

In March 2019, Consumers and a broad coalition of key stakeholders, including business customers, environmental groups, the MPSC Staff, and the Michigan Attorney General, filed an agreement settling the IRP with the MPSC and the MPSC approved it in June 2019.

In recent years, CMS Enterprises completed the development of and now operates a wind generation project and three solar generation projects.

Consumers projects that its electric weather-normalized deliveries will decrease slightly and gas weather-normalized deliveries will remain stable through 2024.

| • | received approval of Consumers’ IRP, which supports the companies’ clean energy goals |

| • | launched a three-year electric vehicle pilot program |

| • | committed to invest $7.5 billion in Michigan businesses over the next five years; of that amount,$1.5 billion will be invested in diverse suppliers |

| • | completed the deployment of automated gas meters in areas where Consumers provides only natural gas to customers, allowing for drive-by meter reading |

| • | ranked the highest in customer satisfaction among large natural gas providers in the Midwest, according to a residential customer satisfaction study conducted by J.D. Power, a global marketing information company |

and replacements and electric supply projects.

These projects, which involve replacement of mains and services and enhancement of transmission and storage systems, should reduce the minor quantity of methane emissions released as gas is transported.

Consumers also expects to spend $2.8 billion on electric supply projects, primarily new renewable generation.

| • | 2018 Electric Rate Case: In May 2018, Consumers filed an application with the MPSC seeking an annual rate increase of $58 million, based on a 10.75 percent authorized return on equity. In October 2018, Consumers reduced its requested annual rate increase to $44 million. In January 2019, the MPSC approved a settlement agreement authorizing an annual rate decrease of $24 million, based on a 10.0 percent authorized return on equity. With the elimination of the |

$113 million TCJA credit to customer bills, the approved settlement agreement resulted in an $89 million net increase in annual rates.

The settlement agreement also provided for deferred accounting treatment for distribution-related capital investments exceeding certain amounts.

| • | 2018 Gas Rate Case: In November 2018, Consumers filed an application with the MPSC seeking an annual rate increase of $229 million, based on a 10.75 percent authorized return on equity. In April 2019, Consumers reduced its requested annual rate increase to $204 million. In September 2019, the MPSC approved an annual rate increase of $144 million, based on a 9.9 percent authorized return on equity. This increase includes a $13 million adjustment to begin returning net regulatory tax liabilities associated with the TCJA to customers. The MPSC also approved the continuation of a revenue decoupling mechanism, which annually reconciles Consumers’ actual weather-normalized, non‑fuel revenues with the revenues approved by the MPSC. |

| • | Tax Cuts and Jobs Act: The TCJA, which changed existing federal tax law and included numerous provisions that affect businesses, was signed into law in December 2017. In October 2018, Consumers filed an application to address the December 31, 2017 remeasurement of its deferred income taxes and other base rate impacts of the TCJA on customers. In September 2019, the MPSC authorized Consumers to begin returning net regulatory tax liabilities of $0.4 billion to gas customers through rates approved in the 2018 gas rate case and $1.2 billion to electric customers through rates to be determined in Consumers’ next electric rate case. Until then, the MPSC authorized Consumers to refund $32 million to electric customers through a temporary bill credit. For details on these proceedings, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Regulatory Matters. |

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| Absence of 2018 income tax benefit associated with electric cost of removal2 | | (26 | | ) | | | | |

| Absence of 2018 research and development tax credits2 | | (9 | | ) | | | | |

| Absence of 2018 settlement of a property tax appeal related to the J.H. Campbell plant | | (7 | | ) | | | | |

| Lower expenses from legacy obligations, net | | 4 | | | | | | |

| Lower earnings due primarily to lower capacity revenue and higher operating and maintenance costs | | (17 | | ) | | (1 | | ) |

| 2019 tax deductions primarily attributable to asset sales | | 4 | | | | | | |

| 3 | See Note 4, Contingencies and Commitments—CMS Energy Contingencies—Gas Index Price Reporting Litigation. |

| Rate increase, including the impacts of the January 2019 order | | $ | 83 | | | | | |

| Effect of new leases accounting standard2 | | 12 | | | | | | |

| Higher service restoration costs from 2019 winter storms | | (38 | | ) | | — | | |

| Absence of 2018 settlement of a property tax appeal related to the J.H. Campbell plant | | (9 | | ) | | | | |

| Lower donations in 2019 | | 6 | | | | | | |

| Effect of new leases accounting standard2 | | (12 | | ) | | | | |

| Lower PSCR and other interest charges | | 8 | | | | (4 | | ) |

| Absence of 2018 income tax benefit associated with cost of removal4 | | (26 | | ) | | | | |

| 2 | Under the provisions of *ASU 2016-02, Leases*, fixed energy and capacity costs associated with Consumers’ PPAs that are accounted for as finance leases are presented as amortization and interest expense, rather than purchased power expense. See Note 10, Leases and Palisades Financing for more information about Consumers’ leases. |

[removed: CMS Energy and Consumers enter into these contracts using established policies and procedures, under] the direction of an executive oversight committee consisting of certain officers and a risk committee consisting of those and other officers and business managers.

| *In Millions* | | | | | | | | | [added: | | | | | |]

| December 31 | [removed: 2019] | | [added: 2020] | | [removed: 2018] | | | | [added: 2019 | | | | | |]

| *Fixed-rate financing—potential loss in fair value* | | | | | | | | | [added: | | | | | |]

| CMS Energy, including Consumers | | [added: | | | |] $ | [removed: 558] [added: 634] | | | [added: | |] $ | [removed: 465] [added: 558] | |

| Consumers | | [removed: 355] | | | | [removed: 330] [added: 372] | | | [added: | | | 355 | | |]

The annual earnings exposure related to variable-rate financing was immaterial for both CMS Energy and Consumers at December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] assuming an adverse change in market interest rates of ten percent.

| Notes receivable—potential loss in fair value | | [added: | | | |] $ | [removed: 61] [added: 77] | | | [added: | |] $ | [removed: 46] [added: 61] | |

The annual earnings exposure related to variable-rate interest receipts at EnerBank was immaterial at December 31, [removed: 2019] [added: 2020] and [removed: 2018.][added: 2019.]

CMS Energy and Consumers enter into these contracts using established policies and procedures, under

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EnerBank provides primarily unsecured, fixed-rate installment loans throughout the U.S. to finance home improvements.

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| *In Millions* | | | | | | | | | | | | | | |

| December 31 | | | 2020 | | | | | | 2019 | | | | | |

Interest-Rate Risk

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EnerBank provides unsecured consumer installment loans, largely for financing home improvements.

CMS Energy’s consolidated operating revenue was [removed: $6.8] [added: $6.7] billion in [removed: 2019, $6.9] [added: 2020, $6.8] billion in [removed: 2018,] [added: 2019,] and [removed: $6.6] [added: $6.9] billion in [removed: 2017.][added: 2018.]

Consumers owns and operates electric [removed: generation, transmission,] [added: generation] and distribution facilities and gas transmission, storage, and distribution facilities.

It provides electricity and/or natural gas to [removed: 6.7] [added: 6.8] million of Michigan’s 10 million residents.

Consumers’ consolidated operating revenue was [removed: $6.4] [added: $6.2] billion in [removed: 2019, $6.5] [added: 2020, $6.4] billion in [removed: 2018,] [added: 2019,] and [removed: $6.2] [added: $6.5] billion in [removed: 2017.][added: 2018.]

In [removed: 2019,] [added: 2020,] Consumers served [removed: 1.8] [added: 1.9] million electric customers and 1.8 million gas customers in Michigan’s Lower Peninsula.

| [removed: ] [added: ] | | | | [added: | | | | | | | |]

| | | [added: | | | |] Electric Service Territory | | [added: | | | |]

| | | [added: | | | |] Gas Service Territory | | [added: | | | |]

| | | [added: | | | |] Combination Electric and Gas Service Territory | | [added: | | | |]

| • | | [added: | | | |] Electric Generation Facilities | | [added: | | | |]

Electric Utility Operations: Consumers’ electric utility operations, which include the generation, purchase, [removed: transmission,] distribution, and sale of electricity, generated operating revenue of $4.4 billion in [added: 2020 and] 2019, [removed: $4.6 billion in 2018,] and [removed: $4.4] [added: $4.6] billion in [removed: 2017.][added: 2018.]

Presented in the following illustration is Consumers’ [removed: 2019] [added: 2020] electric utility operating revenue of $4.4 billion by customer class:

[removed: ][added: ]

In [removed: 2018,] [added: 2020,] Consumers’ electric deliveries were [removed: 38] [added: 35] billion kWh, which included ROA deliveries of [removed: four] [added: three] billion kWh, resulting in net bundled sales of [removed: 34] [added: 32] billion kWh.

Presented in the following illustration are Consumers’ monthly weather-normalized electric deliveries (deliveries adjusted to reflect normal weather conditions) to its customers, including ROA deliveries, during [removed: 2019] [added: 2020] and [removed: 2018:][added: 2019:]

[removed: ][added: ]

Consumers’ [removed: 2019] [added: 2020] summer peak demand was [removed: 8,039] [added: 8,215] MW, which included ROA demand of [removed: 562] [added: 540] MW.

For the [removed: 2018\-2019] [added: 2019-2020] winter season, Consumers’ peak demand was [removed: 5,745] [added: 5,602] MW, which included ROA demand of [removed: 440] [added: 464] MW.

As required by MISO reserve margin requirements, Consumers owns or controls, through long-term PPAs and short-term capacity purchases, all of the capacity required to supply its projected firm peak load and necessary reserve margin for summer [removed: 2020.][added: 2021.]

Electric Utility [removed: Properties:] [added: Properties:] Consumers owns and operates electric [removed: generation, transmission,] [added: generation] and distribution facilities.

[removed: | • | 213] [added: - 205] miles of [removed: transmission] [added: high-voltage distribution] overhead lines operating at 138 kV [removed: |]

[removed: | • | 205] [added: - 4] miles of high-voltage distribution [removed: overhead] [added: underground] lines operating at 138 kV [removed: |]

[removed: | • | 4] [added: - 19] miles of high-voltage distribution underground lines operating at [removed: 138] [added: 46] kV [removed: |]

[removed: | • | 4,430] [added: - 4,428] miles of high-voltage distribution overhead lines operating at 46 kV and 69 kV [removed: |]

[removed: | • | 19] [added: - 9,264] miles of [removed: high-voltage distribution] underground [added: distribution] lines [removed: operating at 46 kV |]

[removed: | • | 66,917] [added: - 77,833] miles of electric distribution overhead lines [removed: |]

[removed: | • |] [added: - 1,096] substations with an aggregate transformer capacity of 26 million kVA [removed: |]

[removed: | • |] [added: -] two battery facilities with storage capacity of 2 MW [removed: |]

[removed: Electric Utility Generation and Supply Mix:] Presented in the following table are details about Consumers’ [removed: 2019] [added: 2020] electric generation and supply mix:

| [added: Name and Location (Michigan)] | [added: | |] Number of Units and Year Entered Service | [removed: 2019] [added: | | 2020] Generation Capacity [added: (MW)] | | [added: |] 1 | [removed: 2019] [added: | | 2020] Electric Supply [added: (GWh)] | | | [added: | | |]

| *Coal steam generation* | | | | | | | | [added: | | | | | | | | | |]

| J.H. Campbell 1 & 2 – West Olive | [added: | |] 2 Units, 1962-1967 | [removed: 609] | | [added: 540] | [removed: 3,124] | | | [added: | | 1,538 | | | | | |]

| J.H. Campbell 3 – West Olive2 | [added: | |] 1 Unit, 1980 | [removed: 782] | | [added: 785] | [removed: 4,890] | | | [added: | | 4,804 | | | | | |]

| D.E. Karn 1 & 2 – Essexville3 | [added: | |] 2 Units, 1959-1961 | [removed: 503] | | [added: 460] | [removed: 1,762] | | | [added: | | 1,618 | | | | | |]

| *Oil/Gas steam generation* | | | | | | | | [added: | | | | | | | | | |]

| D.E. Karn 3 & 4 – Essexville | [added: | |] 2 Units, 1975-1977 | [removed: 1,135] | | [added: 1,058] | [removed: 42] | | | [added: | | 37 | | | | | |]

| *Hydroelectric* | | | | | | | | [added: | | | | | | | | | |]

| Ludington – Ludington | [added: | |] 6 Units, 1973 | [removed: 1,097] | | [added: 975 | | |] 4 | [removed: (308] | [removed: )] | [added: (371) | | |] 5 | [added: | |]

| Conventional hydro generation – various locations | [added: | |] 35 Units, 1906-1949 | [removed: 75] | | [added: 76] | [removed: 512] | | | [added: | | 482 | | | | | |]

| *Gas combined cycle* | | | | | | | | [added: | | | | | | | | | |]

EnerBank provides primarily unsecured, fixed-rate installment loans throughout the U.S. to finance home improvements.

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Consumers’ distribution system consists of:

Electric Utility Generation and Supply Mix: During 2020, Consumers announced a goal of achieving net-zero carbon emissions from its electric business by 2040.

This goal includes not only emissions from Consumers’ owned generation, but also emissions from the generation of power purchased through long-term PPAs and from the MISO energy market.

The remaining emissions will be offset through alternative measures including, but not limited to, carbon sequestration, landfill methane emission capture, and large-scale tree planting.

Specifically, the Clean Energy Plan provides for the retirement of the D.E. Karn 1 & 2 coal-fueled generating units in 2023 and the potential retirement of the J.H. Campbell 1 & 2 coal-fueled generating units in 2031 or earlier.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | 1,785 | | | | | | 7,960 | | | | | |

| | | | | | | 1,051 | | | | | | 111 | | | | | |

| | | | | | | 1,081 | | | | | | 5,251 | | | | | |

| Gratiot Farms Wind Project – Gratiot County | | | 60 Turbines, 2020 | | | — | | | | | | 22 | | | | | |

| | | | | | | 55 | | | | | | 1,017 | | | | | |

| Total owned generation | | | | | | 5,350 | | | | | | 14,983 | | | | | |

| | | | | | | 2,577 | | | | | | 16,982 | | | | | |

| Total supply | | | | | | 7,927 | | | | | | 34,620 | | | | | |

began operation in December 2020.

For wind and solar generation, the amount represents the effective load-carrying capability.

4Represents Consumers’ 51-percent share of the capacity of Ludington.

5Represents Consumers’ share of net pumped-storage generation.

| | | | | | | | | | | | |

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EnerBank provides unsecured consumer installment loans, largely for financing home improvements.

| | | | |

| --- | --- | --- | --- |

Consumers’ transmission and distribution systems consist of:

| | |

| --- | --- |

| • | 9,314 miles of underground distribution lines |

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| Name and Location (Michigan) | (MW) | | | (GWh) | | | |

| | | 1,894 | | | 9,776 | | |

| | | 1,172 | | | 204 | | |

| | | 1,080 | | | 5,917 | | |

| | | 47 | | | 741 | | |

| | | 2,593 | | | 16,607 | | |

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| Total owned generation | 17,020 | | 15,943 | | 16,088 | |

| Total supply | 35,686 | | 37,247 | | 35,552 | |

| • | providing non‑energy services and value to customers |

| Location | (%) | Primary Fuel Type | (MW) | | (GWh) | |

| Total | | | 1,335 | | 6,830 | |

EnerBank’s average loan size is $10,000.

CMS Energy and Consumers continue to focus on opportunities to reduce their carbon footprint in electric generation.

Consumers owns and operates two wind farms: Lake Winds® Energy Park and Cross Winds® Energy Park.

A third phase of Consumers’ Cross Winds® Energy Park, with nameplate capacity of 76 MW, began operations in December 2019.

During 2019, Consumers began construction of a 150-MW wind generation project and entered into an agreement to purchase another with capacity up to 166 MW; both projects are expected to begin commercial operations in 2020.

Additionally, Consumers entered into a 20‑year agreement to purchase 100 MW of renewable energy from a solar generating facility expected to begin operations in 2021.

The EPA proposed additional changes to its wastewater discharges regulations in November 2019, but has not finalized revisions.

Employees

| Total employees | 8,789 | | 8,625 | | 7,952 | |

| Consumers1 | | | | | | |

| Total employees | 8,253 | | 8,121 | | 7,496 | |

| 2 | Consumers’ seasonal workforce peaked at 614 employees during 2019 and 2018, and 598 employees during 2017. Seasonal employees work primarily during the construction season and are subject to yearly layoffs. |

| Patricia K. Poppe (age 51) | |

| *Consumers* | |

| Director | 11/2017 – Present |

[removed: FORM 10-K][added: FORM 10-K]

For the fiscal year [removed: ended December] [added: ended December] 31, [removed: 2019][added: 2020]

| Commission File Number | [added: | |] Registrant; State of Incorporation; Address; and Telephone Number | [added: | |] IRS Employer Identification No. | [added: | |]

| 1-9513 | [added: | |] CMS ENERGY CORPORATION | [added: | |] 38-2726431 | [added: | |]

| 1-5611 | [added: | |] CONSUMERS ENERGY COMPANY | [added: | |] 38-0442310 | [added: | |]

| Securities registered pursuant to Section 12(b) of the Act: | | | | | [added: | | | | | | | | | |]

| Title of each class | | [added: | | | |] Trading Symbol(s) | | [added: | | | |] Name of each exchange on which registered | [added: | |]

| CMS Energy Corporation Common Stock, $0.01 par value | | [added: | | | |] CMS | | [added: | | | |] New York Stock Exchange | [added: | |]

| CMS Energy Corporation 5.625% Junior Subordinated Notes due 2078 | | [added: | | | |] CMSA | | [added: | | | |] New York Stock Exchange | [added: | |]

| CMS Energy Corporation 5.875% Junior Subordinated Notes due 2078 | | [added: | | | |] CMSC | | [added: | | | |] New York Stock Exchange | [added: | |]

| CMS Energy Corporation 5.875% Junior Subordinated Notes due 2079 | | [added: | | | |] CMSD | | [added: | | | |] New York Stock Exchange | [added: | |]

| Consumers Energy Company Cumulative Preferred Stock, $100 par value: $4.50 Series | | [added: | | | |] CMS-PB | | [added: | | | |] New York Stock Exchange | [added: | |]

| Securities registered pursuant to Section 12(g) of the Act: | [added: | |] None | | [added: | | | |]

| Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | |]

| CMS Energy Corporation: | [added: | |] Yes | [added: | |] ☒ | [added: | |] No | [added: | |] ☐ | | [added: | | | |] Consumers Energy Company: | [added: | |] Yes | [added: | |] ☒ | [added: | |] No | [added: | |] ☐ | | [added: | | | |]

| Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | |]

| CMS Energy Corporation: | [added: | |] Yes | [added: | |] ☐ | [added: | |] No | [added: | |] ☒ | | [added: | | | |] Consumers Energy Company: | [added: | |] Yes | [added: | |] ☐ | [added: | |] No | [added: | |] ☒ | | [added: | | | |]

| 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. | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | |]

| Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | |]

| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act. | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | |]

| CMS Energy Corporation: | | | | | | [added: | | | | | | | | | | | |] Consumers Energy Company: | | | | | | [added: | | | | | | | | | | | |]

| Large accelerated filer | | [added: | | | |] ☒ | | | | [added: | | | | | | | |] Large accelerated filer | | [added: | | | |] ☐ | | | | [added: | | | | | | | |]

| Non‑accelerated filer | | [added: | | | |] ☐ | | | | [added: | | | | | | | |] Non‑accelerated filer | | [added: | | | |] ☒ | | | | [added: | | | | | | | |]

| Accelerated filer | | [added: | | | |] ☐ | | | | [added: | | | | | | | |] Accelerated filer | | [added: | | | |] ☐ | | | | [added: | | | | | | | |]

| Smaller reporting company | | [added: | | | |] ☐ | | | | [added: | | | | | | | |] Smaller reporting company | | [added: | | | |] ☐ | | | | [added: | | | | | | | |]

| Emerging growth company | | [added: | | | |] ☐ | | | | [added: | | | | | | | |] Emerging growth company | | [added: | | | |] ☐ | | | | [added: | | | | | | | |]

| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | |]

| CMS Energy Corporation: | | [added: | | | |] ☐ | | | | [added: | | | | | | | |] Consumers Energy Company: | | [added: | | | |] ☐ | | | | [added: | | | | | | | |]

| Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | |]

The aggregate market value of CMS Energy voting and non‑voting common equity held by non‑affiliates was [removed: $16.352] [added: $16.647] billion for the [removed: 282,365,464] [added: 284,957,910] CMS Energy Corporation Common Stock shares outstanding on June 30, [removed: 2019] [added: 2020] based on the closing sale price of [removed: $57.91] [added: $58.42] for CMS Energy Corporation 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, [removed: 2019.][added: 2020.]

There were [removed: 283,882,207] [added: 288,943,354] shares of CMS Energy Corporation Common Stock outstanding on January [removed: 10, 2020, including 12,322 shares owned by Consumers.][added: 15, 2021.]

On January [removed: 10, 2020,] [added: 15, 2021,] CMS Energy held all 84,108,789 outstanding shares of common stock of Consumers.

Documents incorporated by reference in Part III: CMS Energy’s and Consumers’ proxy statement relating to their [removed: 2020] [added: 2021] Annual Meetings of Shareholders to be held May [removed: 1, 2020.][added: 7, 2021.]

Annual Reports on Form 10-K to the Securities and Exchange Commission for the Year [removed: Ended December] [added: Ended December] 31, [removed: 2019][added: 2020]

| [Filing [removed: Format](#sE3C84B4FD8DD56BD938E79DD4BE6C2EB)] [added: Format](#ibe111af6d52149569b23f8b48d5770c6_13)] | | [removed: [10](#sE3C84B4FD8DD56BD938E79DD4BE6C2EB)] | [added: | | | [10](#ibe111af6d52149569b23f8b48d5770c6_13) | | |]

| [Forward-Looking Statements and [removed: Information](#sDFEBD368B4535E69BA84E209F10F6C7D)] [added: Information](#ibe111af6d52149569b23f8b48d5770c6_16)] | | [removed: [10](#sDFEBD368B4535E69BA84E209F10F6C7D)] | [added: | | | [10](#ibe111af6d52149569b23f8b48d5770c6_16) | | |]

| [Item [removed: 1.](#s3410BE00403853B7A2F4225627D7FC8E)] [added: 1.](#ibe111af6d52149569b23f8b48d5770c6_22)] | [removed: [Business](#s3410BE00403853B7A2F4225627D7FC8E)] | [removed: [14](#s3410BE00403853B7A2F4225627D7FC8E)] | [added: [Business](#ibe111af6d52149569b23f8b48d5770c6_22) | | | [14](#ibe111af6d52149569b23f8b48d5770c6_22) | | |]

| [Item [removed: 1A.](#s5B42C186A9F55F36B0E60CE3A4D205DB)] [added: 1A.](#ibe111af6d52149569b23f8b48d5770c6_25)] | [added: | |] [Risk [removed: Factors](#s5B42C186A9F55F36B0E60CE3A4D205DB)] [added: Factors](#ibe111af6d52149569b23f8b48d5770c6_25)] | [removed: [33](#s5B42C186A9F55F36B0E60CE3A4D205DB)] | [added: | [36](#ibe111af6d52149569b23f8b48d5770c6_25) | | |]

| [Item [removed: 1B.](#sA5AE215FAE3F536A95B9BFDF0056D225)] [added: 1B.](#ibe111af6d52149569b23f8b48d5770c6_28)] | [added: | |] [Unresolved Staff [removed: Comments](#sA5AE215FAE3F536A95B9BFDF0056D225)] [added: Comments](#ibe111af6d52149569b23f8b48d5770c6_28)] | [removed: [45](#sA5AE215FAE3F536A95B9BFDF0056D225)] | [added: | [46](#ibe111af6d52149569b23f8b48d5770c6_28) | | |]

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| CMS Energy Corporation: | | | Yes | | | ☒ | | | No | | | ☐ | | | | | | Consumers Energy Company: | | | Yes | | | ☒ | | | No | | | ☐ | | | | | |

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| CMS Energy Corporation: | | | Yes | | | ☒ | | | No | | | ☐ | | | | | | Consumers Energy Company: | | | Yes | | | ☒ | | | No | | | ☐ | | | | | |

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| Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| CMS Energy Corporation: | | | | | | ☒ | | | | | | | | | | | | Consumers Energy Company: | | | | | | ☒ | | | | | | | | | | | |

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| CMS Energy Corporation: | | | Yes | | | ☐ | | | No | | | ☒ | | | | | | Consumers Energy Company: | | | Yes | | | ☐ | | | No | | | ☒ | | | | | |

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| [Glossary](#ibe111af6d52149569b23f8b48d5770c6_10) | | | | | | [2](#ibe111af6d52149569b23f8b48d5770c6_10) | | |

| [Part I](#ibe111af6d52149569b23f8b48d5770c6_19) | | | | | | [14](#ibe111af6d52149569b23f8b48d5770c6_19) | | |

| [Part II](#ibe111af6d52149569b23f8b48d5770c6_40) | | | | | | [47](#ibe111af6d52149569b23f8b48d5770c6_40) | | |

| [Part III](#ibe111af6d52149569b23f8b48d5770c6_262) | | | | | | [191](#ibe111af6d52149569b23f8b48d5770c6_262) | | |

| [Part IV](#ibe111af6d52149569b23f8b48d5770c6_280) | | | | | | [195](#ibe111af6d52149569b23f8b48d5770c6_280) | | |

| [Signatures](#ibe111af6d52149569b23f8b48d5770c6_322) | | | | | | [208](#ibe111af6d52149569b23f8b48d5770c6_322) | | |

Aviator Wind

Aviator Wind, LLC, a VIE in which Aviator Wind Equity Holdings holds a Class B membership interest

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| [Glossary](#sAA0CA22A61BE525FA4929CC994D436DD) | | [2](#sAA0CA22A61BE525FA4929CC994D436DD) |

| [Part I](#sE98756D3DD0C5FEA915AB42236ABC66F) | | [14](#sE98756D3DD0C5FEA915AB42236ABC66F) |

| [Part II](#sB568F40A83755FA9B09771F63D880CA4) | | [46](#sB568F40A83755FA9B09771F63D880CA4) |

| [Part III](#s5637501767B05955AD6CCC7715A7AEE0) | | [184](#s5637501767B05955AD6CCC7715A7AEE0) |

| [Part IV](#sD9BA0ECAF2D4547D834B187A093A9557) | | [187](#sD9BA0ECAF2D4547D834B187A093A9557) |

| [Signatures](#s828C67EEA2CF5BEA9DF83655CDA37D72) | | [200](#s828C67EEA2CF5BEA9DF83655CDA37D72) |

owning securitization property, issuing securitization bonds, and pledging its interest in securitization property to a trustee to collateralize the securitization bonds

EBITDA

Earnings before interest, taxes, depreciation, and amortization

FLI Liquidating Trust

Trust formed in Missouri bankruptcy court to accomplish the liquidation of Farmland Industries, Inc., a non‑affiliated entity

ITC

International Transmission Company, wholly owned by ITC Holdings Corp., a non‑affiliated company

MISS DIG Act

MISS DIG Underground Facility Damage Prevention and Safety Act of 2013

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equipment or materials; electric transmission and distribution or gas pipeline system constraints; interconnection requirements; and changes in trade policies or regulations

| • | changes in financial or regulatory accounting principles or policies |

[removed: | • |] [added: -] General—CMS Energy [removed: |]

[removed: | • |] [added: -] General—Consumers [removed: |]

[removed: | • |] [added: -] Business Segments—Consumers Electric Utility—Electric Utility Properties [removed: |]

[removed: | • |] [added: -] Business Segments—Consumers Gas Utility—Gas Utility Properties [removed: |]

[removed: | • |] [added: -] Business Segments—Enterprises Segment—Non-Utility Operations and Investments—Independent Power Production [removed: |]

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At January [removed: 10, 2020,] [added: 15, 2021,] the number of registered holders of CMS Energy’s common stock totaled [removed: 28,495,] [added: 28,083,] based on the number of record holders.

[removed: ][added: ]

| | [added: | |] Five-Year Cumulative Total Return | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

| Company/Index | [removed: 2014] | | [added: 2015] | | [removed: 2015] | | | | 2016 | | | | [added: | |] 2017 | | | | [added: | |] 2018 | | | | [added: | |] 2019 | | | | [added: | | 2020 | | | | | |]

Presented in the following table are CMS Energy’s repurchases of equity securities for the three months ended December 31, [removed: 2019:][added: 2020:]

| [removed: |] Period | [added: | |] Total Number of Shares Purchased1 | | | [added: | | |] Average Price Paid per Share | | | | [added: | |] Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | | [added: | | |] Maximum Number of Shares That May Yet Be Purchased Under Publicly Announced Plans or Programs | | | [added: | | |]

[removed: | 1 | All] [added: 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. [removed: The value of shares repurchased is based on the market price on the vesting date. |]

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| CMS Energy | | | | | | $ | 100 | | | | | $ | 119 | | | | | $ | 139 | | | | | $ | 151 | | | | | $ | 196 | | | | | $ | 195 | |

| S&P 500 Index | | | | | | 100 | | | | | | 112 | | | | | | 136 | | | | | | 130 | | | | | | 171 | | | | | | 203 | | |

| Dow Jones Utility Index | | | | | | 100 | | | | | | 118 | | | | | | 134 | | | | | | 137 | | | | | | 174 | | | | | | 177 | | |

| S&P 400 Utilities Index | | | | | | 100 | | | | | | 127 | | | | | | 141 | | | | | | 151 | | | | | | 173 | | | | | | 149 | | |

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| October 1, 2020 to October 31, 2020 | | | | | | 406 | | | | | | $ | 63.78 | | | | | — | | | | | | — | | |

| November 1, 2020 to November 30, 2020 | | | | | | 235 | | | | | | 63.92 | | | | | | — | | | | | | — | | |

| December 1, 2020 to December 31, 2020 | | | | | | 623 | | | | | | 59.48 | | | | | | — | | | | | | — | | |

| Total | | | | | | 1,264 | | | | | | $ | 61.69 | | | | | — | | | | | | — | | |

The value of shares repurchased is based on the market price on the vesting date.

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| CMS Energy | | $ | 100 | | | $ | 107 | | | $ | 128 | | | $ | 149 | | | $ | 162 | | | $ | 210 | |

| S&P 500 Index | | 100 | | | | 101 | | | | 113 | | | | 138 | | | | 132 | | | | 174 | | |

| Dow Jones Utility Index | | 100 | | | | 97 | | | | 115 | | | | 130 | | | | 132 | | | | 169 | | |

| S&P 400 Utilities Index | | 100 | | | | 94 | | | | 120 | | | | 133 | | | | 142 | | | | 163 | | |

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| | October 1, 2019 to October 31, 2019 | | — | | | $ | — | | | — | | | — | |

| | November 1, 2019 to November 30, 2019 | | 8,853 | | | 60.49 | | | | — | | | — | |

| | December 1, 2019 to December 31, 2019 | | 9,734 | | | 61.53 | | | | — | | | — | |

| | Total | | 18,587 | | | $ | 61.03 | | | — | | | — | |

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| | | | | | [added: | 2020 | | |] 2019 | | [added: |] 2018 | | [added: |] 2017 | | [removed: 2016] | [added: 2016] | [removed: 2015] | |

| Operating revenue (in millions) | | | [removed: |] ($) | [added: | | 6,680 | | |] 6,845 | | [added: |] 6,873 | | [added: |] 6,583 | | [removed: 6,399] | [added: 6,399] | [removed: 6,456] | |

| Income from equity method investees (in millions) | | | [removed: |] ($) | [added: | | 5 | | |] 10 | | [added: |] 9 | | [added: |] 15 | | [removed: 13] | [added: 13] | [removed: 14] | |

| Net income (in [removed: millions)¹ |] [added: millions)] | | | ($) | [added: | | 752 | | |] 682 | | [added: |] 659 | | [added: |] 462 | | [removed: 553] | [added: 553] | [removed: 525] | |

| Net income available to common stockholders (in millions) | | | [removed: |] ($) | [added: | | 755 | | |] 680 | | [added: |] 657 | | [added: |] 460 | | [removed: 551] | [added: 551] | [removed: 523] | |

| Average common shares outstanding (in millions) | | | | | [added: | 285.0 | | |] 283.0 | | [added: |] 282.2 | | [added: |] 280.0 | | [removed: 277.9] | [added: 277.9] | [removed: 275.6] | |

| Earnings per average common share | | | | | | | | | | | | | | | [added: | | | | | |]

| [removed: CMS Energy | — |] [added: –] Basic | | [added: |] ($) | [added: | | 2.65 | | |] 2.40 | | [added: |] 2.33 | | [added: |] 1.64 | | [removed: 1.99] | [added: 1.99] | [removed: 1.90] | |

| [removed: | — |] [added: –] Diluted | | [added: |] ($) | [added: | | 2.64 | | |] 2.39 | | [added: |] 2.32 | | [added: |] 1.64 | | [removed: 1.98] | [added: 1.98] | [removed: 1.89] | |

| Cash provided by operations (in millions) | | | [removed: |] ($) | [added: | | 1,276 | | |] 1,790 | | [added: |] 1,703 | | [added: |] 1,705 | | [removed: 1,629] | [added: 1,629] | [removed: 1,640] | |

| Capital expenditures, excluding assets placed under finance lease (in millions) | | | [removed: |] ($) | [added: | | 2,317 | | |] 2,104 | | [added: |] 2,074 | | [added: |] 1,665 | | [removed: 1,672] | [added: 1,672] | [removed: 1,564] | |

| Total assets (in millions) | | | [removed: |] ($) | [added: | | 29,666 | | |] 26,837 | | [added: |] 24,529 | | [added: |] 23,050 | | [removed: 21,622] | [added: 21,622] | [removed: 20,299] | |

| Long-term debt, excluding current portion (in millions) | | | [removed: |] ($) | [added: | | 13,634 | | |] 11,951 | | [added: |] 10,615 | | [added: |] 9,123 | | [removed: 8,640] | [added: 8,640] | [removed: 8,400] | |

| [removed: Non*‑*current] [added: Non‑current] portion of finance leases and other financing (in millions) | | | [removed: |] ($) | [added: | | 56 | | |] 76 | | [added: |] 69 | | [added: |] 91 | | [removed: 110] | [added: 110] | [removed: 118] | |

| Cash dividends declared per common share | | | [removed: |] ($) | [added: | | 1.63 | | |] 1.53 | | [added: |] 1.43 | | [added: |] 1.33 | | [removed: 1.24] | [added: 1.24] | [removed: 1.16] | |

| Market price of common stock at year-end | | | [removed: |] ($) | [added: | | 61.01 | | |] 62.84 | | [added: |] 49.65 | | [added: |] 47.30 | | [removed: 41.62] | [added: 41.62] | [removed: 36.08] | |

| Book value per common share at year-end | | | [removed: |] ($) | [added: | | 19.02 | | |] 17.67 | | [added: |] 16.78 | | [added: |] 15.77 | | [removed: 15.23] | [added: 15.23] | [removed: 14.21] | |

| Total employees at year-end | | | | | [added: | 8,837 | | |] 8,789 | | [added: |] 8,625 | | [added: |] 7,952 | | [removed: 7,800] | [added: 7,800] | [removed: 7,804] | |

| Electric Utility Statistics | | | | | | | | | | | | | | | [added: | | | | | |]

| Sales (billions of kWh) | | | | | [removed: 37] | [added: 35] | [removed: 38] | | 37 | | [added: |] 38 | | [added: |] 37 | | [added: | 38 | | |]

| Customers (in thousands) | | | | | [added: | 1,866 | | |] 1,848 | | [added: |] 1,831 | | [added: |] 1,826 | | [removed: 1,805] | [added: 1,805] | [removed: 1,803] | |

| Average sales rate per kWh | | | [removed: |] (¢) | [added: | | 11.74 | | |] 11.64 | | [added: |] 11.78 | | [added: |] 11.98 | | [removed: 11.63] | [added: 11.63] | [removed: 11.39] | |

| Gas Utility Statistics | | | | | | | | | | | | | | | [added: | | | | | |]

| Sales and transportation deliveries (bcf) | | | | | [added: | 360 | | |] 391 | | [added: |] 386 | | [added: |] 352 | | [removed: 358] | [added: 358] | [removed: 356] | |

| Customers (in [removed: thousands)2] [added: thousands)1] | | | | | [added: | 1,804 | | |] 1,793 | | [added: |] 1,784 | | [added: |] 1,776 | | [removed: 1,772] | [added: 1,772] | [removed: 1,741] | |

| Average sales rate per mcf | | | [removed: |] ($) | [added: | | 7.60 | | |] 7.44 | | [added: |] 7.44 | | [added: |] 7.51 | | [removed: 7.31] | [added: 7.31] | [removed: 7.89] | |

| [removed: 1 | Includes income] [added: Income (loss)] attributable to noncontrolling interests [removed: of $2 million in each period.] [added: (in millions)] | [added: | | ($) | | | (3) | | | 2 | | | 2 | | | 2 | | | 2 | | |]

[removed: | 2 | Excludes] [added: 1Excludes] off-system transportation customers. [removed: |]

| | | | [added: | | | 2020 | | |] 2019 | | [added: |] 2018 | | [added: |] 2017 | | [removed: 2016] | [added: 2016] | [removed: 2015] | |

| Operating revenue (in millions) | | [added: |] ($) | [added: | | 6,189 | | |] 6,376 | | [added: |] 6,464 | | [added: |] 6,222 | | [removed: 6,064] | [added: 6,064] | [removed: 6,165] | |

| Net income (in millions) | | [added: |] ($) | [added: | | 816 | | |] 743 | | [added: |] 705 | | [added: |] 632 | | [removed: 616] | [added: 616] | [removed: 594] | |

| Net income available to common stockholder (in millions) | | [added: |] ($) | [added: | | 814 | | |] 741 | | [added: |] 703 | | [added: |] 630 | | [removed: 614] | [added: 614] | [removed: 592] | |

| Cash provided by operations (in millions) | | [added: |] ($) | [added: | | 1,218 | | |] 1,601 | | [added: |] 1,449 | | [added: |] 1,715 | | [removed: 1,681] | [added: 1,681] | [removed: 1,794] | |

| Capital expenditures, excluding assets placed under finance lease (in millions) | | [added: |] ($) | [added: | | 2,170 | | |] 2,085 | | [added: |] 1,822 | | [added: |] 1,632 | | [removed: 1,656] | [added: 1,656] | [removed: 1,537] | |

| Total assets (in millions) | | [added: |] ($) | [added: | | 25,399 | | |] 23,699 | | [added: |] 22,025 | | [added: |] 21,099 | | [removed: 19,946] | [added: 19,946] | [removed: 18,635] | |

| Long-term debt, excluding current portion (in millions) | | [added: |] ($) | [added: | | 7,742 | | |] 7,048 | | [added: |] 6,779 | | [added: |] 5,561 | | [removed: 5,253] | [added: 5,253] | [removed: 5,183] | |

| [removed: Non*‑*current] [added: Non‑current] portion of finance leases and other financing (in millions) | | [added: |] ($) | [added: | | 56 | | |] 76 | | [added: |] 69 | | [added: |] 91 | | [removed: 110] | [added: 110] | [removed: 118] | |

| Total preferred stock (in millions) | | [added: |] ($) | [added: | |] 37 | | [added: |] 37 | | [added: |] 37 | | [added: |] 37 | | [added: |] 37 | | [added: |]

| Number of preferred stockholders at year-end | | | [added: | | | 922 | | |] 968 | | [added: |] 1,017 | | [added: |] 1,056 | | [removed: 1,095] | [added: 1,095] | [removed: 1,156] | |

| Total employees at year-end | | | [added: | | | 8,230 | | |] 8,253 | | [added: |] 8,121 | | [added: |] 7,496 | | [removed: 7,366] | [added: 7,366] | [removed: 7,394] | |

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| [CMS Energy Consolidated Financial [removed: Statements](#s6F41FEE6D35E5B3683E67862A99C3DEE)] [added: Statements](#ibe111af6d52149569b23f8b48d5770c6_82)] | | [removed: [86](#s6F41FEE6D35E5B3683E67862A99C3DEE)] | [added: | | | [92](#ibe111af6d52149569b23f8b48d5770c6_82) | | |]

| [Consolidated Statements of [removed: Income](#s26631747BB58533797104AC87A46FAAB)] [added: Income](#ibe111af6d52149569b23f8b48d5770c6_85)] | | [removed: [86](#s26631747BB58533797104AC87A46FAAB)] | [added: | | | [92](#ibe111af6d52149569b23f8b48d5770c6_85) | | |]

| [Consolidated Statements of Comprehensive [removed: Income](#s6166B76BA1B558408C77CCA4720D591C)] [added: Income](#ibe111af6d52149569b23f8b48d5770c6_88)] | | [removed: [87](#s6166B76BA1B558408C77CCA4720D591C)] | [added: | | | [93](#ibe111af6d52149569b23f8b48d5770c6_88) | | |]

| [Consolidated Statements of Cash [removed: Flows](#s758658304C5356ACA442A68085D33EAC)] [added: Flows](#ibe111af6d52149569b23f8b48d5770c6_94)] | | [removed: [88](#s758658304C5356ACA442A68085D33EAC)] | [added: | | | [94](#ibe111af6d52149569b23f8b48d5770c6_94) | | |]

| [Consolidated Balance [removed: Sheets](#sFCE6C501AEAE573C8234511711184022)] [added: Sheets](#ibe111af6d52149569b23f8b48d5770c6_97)] | | [removed: [90](#sFCE6C501AEAE573C8234511711184022)] | [added: | | | [96](#ibe111af6d52149569b23f8b48d5770c6_97) | | |]

| [Consolidated Statements of Changes in [removed: Equity](#s2A6C6399C7D557C5A2DDCA97A89857EA)] [added: Equity](#ibe111af6d52149569b23f8b48d5770c6_103)] | | [removed: [92](#s2A6C6399C7D557C5A2DDCA97A89857EA)] | [added: | | | [98](#ibe111af6d52149569b23f8b48d5770c6_103) | | |]

| [Consumers Consolidated Financial [removed: Statements](#s7CB2DD353DF1574F93C90D305DAF41ED)] [added: Statements](#ibe111af6d52149569b23f8b48d5770c6_109)] | | [removed: [94](#s7CB2DD353DF1574F93C90D305DAF41ED)] | [added: | | | [100](#ibe111af6d52149569b23f8b48d5770c6_109) | | |]

| [Consolidated Statements of [removed: Income](#sBF1B3512E17D5222BC6ADCC7B0F21DD2)] [added: Income](#ibe111af6d52149569b23f8b48d5770c6_112)] | | [removed: [94](#sBF1B3512E17D5222BC6ADCC7B0F21DD2)] | [added: | | | [100](#ibe111af6d52149569b23f8b48d5770c6_112) | | |]

| [Consolidated Statements of Comprehensive [removed: Income](#s87B0606A1C595EFDB155071E77F55B9A)] [added: Income](#ibe111af6d52149569b23f8b48d5770c6_115)] | | [removed: [95](#s87B0606A1C595EFDB155071E77F55B9A)] | [added: | | | [101](#ibe111af6d52149569b23f8b48d5770c6_115) | | |]

| [Consolidated Statements of Cash [removed: Flows](#s1B247B52B2E55329B99527BD06C939A0)] [added: Flows](#ibe111af6d52149569b23f8b48d5770c6_121)] | | [removed: [96](#s1B247B52B2E55329B99527BD06C939A0)] | [added: | | | [102](#ibe111af6d52149569b23f8b48d5770c6_121) | | |]

| [Consolidated Balance [removed: Sheets](#s716013C56FA65800B9FC11BC3287145B)] [added: Sheets](#ibe111af6d52149569b23f8b48d5770c6_124)] | | [removed: [98](#s716013C56FA65800B9FC11BC3287145B)] | [added: | | | [104](#ibe111af6d52149569b23f8b48d5770c6_124) | | |]

| [Consolidated Statements of Changes in [removed: Equity](#s46FD000744195D81B035760A5B540CA8)] [added: Equity](#ibe111af6d52149569b23f8b48d5770c6_130)] | | [removed: [100](#s46FD000744195D81B035760A5B540CA8)] | [added: | | | [106](#ibe111af6d52149569b23f8b48d5770c6_130) | | |]

| [Notes to the Consolidated Financial [removed: Statements](#s7DF1F3B45DB25E668AF1DA666D7E1E28)] [added: Statements](#ibe111af6d52149569b23f8b48d5770c6_136)] | | [removed: [101](#s7DF1F3B45DB25E668AF1DA666D7E1E28)] | [added: | | | [107](#ibe111af6d52149569b23f8b48d5770c6_136) | | |]

[removed: | [1:](#s9663D36FD62B53B49077244637843E0B) | [Significant] [added: 1: Significant] Accounting [removed: Policies](#s9663D36FD62B53B49077244637843E0B) | [101](#s9663D36FD62B53B49077244637843E0B) |][added: Policies]

[removed: | [2:](#sC74603418D6B5606A927E346925D0744) | [New] [added: 2: New] Accounting [removed: Standards](#sC74603418D6B5606A927E346925D0744) | [103](#sC74603418D6B5606A927E346925D0744) |][added: Standards]

[removed: | [3:](#sCE84F56AD51B5C0AB286E1557CFDDEC8) | [Regulatory Matters](#sCE84F56AD51B5C0AB286E1557CFDDEC8) | [105](#sCE84F56AD51B5C0AB286E1557CFDDEC8) |][added: 3: Regulatory Matters]

[removed: | [4:](#s252A037CE88E51128BCEBB70ADE3B868) | [Contingencies] [added: 4: Contingencies] and [removed: Commitments](#s252A037CE88E51128BCEBB70ADE3B868) | [111](#s252A037CE88E51128BCEBB70ADE3B868) |][added: Commitments]

[removed: | [5:](#s65E6E42CAF8D59BFBE1442E1CEDD5091) | [Financings] [added: 5: Financings] and [removed: Capitalization](#s65E6E42CAF8D59BFBE1442E1CEDD5091) | [119](#s65E6E42CAF8D59BFBE1442E1CEDD5091) |][added: Capitalization]

[removed: | [6:](#sB7B24E31912A5C2EBBD17B2D16678CD2) | [Fair] [added: 6: Fair] Value [removed: Measurements](#sB7B24E31912A5C2EBBD17B2D16678CD2) | [126](#sB7B24E31912A5C2EBBD17B2D16678CD2) |][added: Measurements]

[removed: | [7:](#s7670AD3367C453C8AA652D5CDED6EA5B) | [Financial Instruments](#s7670AD3367C453C8AA652D5CDED6EA5B) | [127](#s7670AD3367C453C8AA652D5CDED6EA5B) |][added: 7: Financial Instruments]

[removed: | [8:](#sCEB42DC3C0C75BECB03ED9BFD96AC92A) | [Notes Receivable](#sCEB42DC3C0C75BECB03ED9BFD96AC92A) | [130](#sCEB42DC3C0C75BECB03ED9BFD96AC92A) |][added: 8: Notes Receivable]

| [removed: [9:](#s8BA6316100B65381A27113C50F41916A) | [Plant,] [added: Plant,] Property, and [removed: Equipment](#s8BA6316100B65381A27113C50F41916A)] [added: Equipment] | [removed: [132](#s8BA6316100B65381A27113C50F41916A)] | [added: | | | | | | | | | | | | |]

[removed: | [10:](#s917E10FB09E750C09913AF66537E4BBA) | [Leases] [added: 10: Leases] and Palisades [removed: Financing](#s917E10FB09E750C09913AF66537E4BBA) | [136](#s917E10FB09E750C09913AF66537E4BBA) |][added: Financing]

[removed: | [11:](#s59D7510D85C95A82999F17DE59C2500B) | [Asset] [added: 11: Asset] Retirement [removed: Obligations](#s59D7510D85C95A82999F17DE59C2500B) | [141](#s59D7510D85C95A82999F17DE59C2500B) |][added: Obligations]

[removed: | [12:](#s281AC4D49B6A588793CE6CCB1A3BE17F) | [Retirement Benefits](#s281AC4D49B6A588793CE6CCB1A3BE17F) | [143](#s281AC4D49B6A588793CE6CCB1A3BE17F) |][added: 12: Retirement Benefits]

[removed: | [13:](#sEE2E67EBD6065251A7A521A331D52B5F) | [Stock-Based Compensation](#sEE2E67EBD6065251A7A521A331D52B5F) | [153](#sEE2E67EBD6065251A7A521A331D52B5F) |][added: 13: Stock-Based Compensation]

[removed: | [14:](#s8F8A6225C6225FAA93A7A36EFFC1949B) | [Income Taxes](#s8F8A6225C6225FAA93A7A36EFFC1949B) | [157](#s8F8A6225C6225FAA93A7A36EFFC1949B) |][added: 14: Income Taxes]

[removed: | [15:](#s66D5B004F1035BC9BE256A328FBE921D) | [Earnings] [added: 15: Earnings] Per Share—CMS [removed: Energy](#s66D5B004F1035BC9BE256A328FBE921D) | [162](#s66D5B004F1035BC9BE256A328FBE921D) |][added: Energy]

[removed: | [17:](#s273200567BD65369880EE2C14DA7F163) | [Other] [added: 17: Other] Income and Other [removed: Expense](#s273200567BD65369880EE2C14DA7F163) | [166](#s273200567BD65369880EE2C14DA7F163) |][added: Expense]

| [removed: [18:](#s4859E812752154078B0A7746A3A9849C) | [Cash and] Cash [removed: Equivalents](#s4859E812752154078B0A7746A3A9849C)] [added: and cash equivalents] | [removed: [166](#s4859E812752154078B0A7746A3A9849C)] | [added: | | | | $ | 20 | | | | | $ | 11 | |]

[removed: | [19:](#sFF6631836EA15E8D89B8AED8C9598CD2) | [Reportable Segments](#sFF6631836EA15E8D89B8AED8C9598CD2) | [167](#sFF6631836EA15E8D89B8AED8C9598CD2) |][added: 19: Reportable Segments]

[removed: | [20:](#s9E4A55A486DC535CBA005E3B7EB6487D) | [Related-Party Transactions—Consumers](#s9E4A55A486DC535CBA005E3B7EB6487D) | [171](#s9E4A55A486DC535CBA005E3B7EB6487D) |][added: 20: Related-Party Transactions—Consumers]

[removed: | [21:](#s92159F45D5C558AE933DDF5217B97836) | [Variable] [added: 21: Variable] Interest [removed: Entities](#s92159F45D5C558AE933DDF5217B97836) | [172](#s92159F45D5C558AE933DDF5217B97836) |][added: Entities]

[removed: | [22:](#s61e77576c2844e11ab079d7fde203725) | [Asset Sales] [added: 22: Asset Sale] and Exit [removed: Activities](#s61e77576c2844e11ab079d7fde203725) | [173](#s61e77576c2844e11ab079d7fde203725) |][added: Activities]

[removed: | [23:](#s9141922A90F3559C808D6D8EFE9A1584) | [Quarterly] [added: 23: Quarterly] Financial and Common Stock Information [removed: (Unaudited)](#s9141922A90F3559C808D6D8EFE9A1584) | [174](#s9141922A90F3559C808D6D8EFE9A1584) |][added: (Unaudited)]

| [Reports of Independent Registered Public Accounting [removed: Firm](#s2E2466CE740F5C7BAEE67A8DE8791B60)] [added: Firm](#ibe111af6d52149569b23f8b48d5770c6_247)] | | [removed: [176](#s2E2466CE740F5C7BAEE67A8DE8791B60)] | [added: | | | [182](#ibe111af6d52149569b23f8b48d5770c6_247) | | |]

| [removed: [CMS Energy](#s2E2466CE740F5C7BAEE67A8DE8791B60)] [added: CMS Energy] | | [removed: [176](#s2E2466CE740F5C7BAEE67A8DE8791B60)] | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| *In Millions, Except Per Share Amounts* | | | | | | | | | | | | | [added: | | | | | | | |]

| Years Ended December 31 | [added: | | 2020 | | | | | |] 2019 | | | | [removed: 2018] | | [added: 2018] | | [removed: 2017] | | | |

| Operating Revenue | | [added: | | | |] $ | [removed: 6,845] [added: 6,680] | | | [added: | |] $ | [removed: 6,873] [added: 6,845] | | | [added: | |] $ | [removed: 6,583] [added: 6,873] | |

| [4:](#ibe111af6d52149569b23f8b48d5770c6_154) | | | [Contingencies and Commitments](#ibe111af6d52149569b23f8b48d5770c6_154) | | | [117](#ibe111af6d52149569b23f8b48d5770c6_154) | | |

| [9:](#ibe111af6d52149569b23f8b48d5770c6_178) | | | [Plant, Property, and Equipment](#ibe111af6d52149569b23f8b48d5770c6_178) | | | [138](#ibe111af6d52149569b23f8b48d5770c6_178) | | |

| [11:](#ibe111af6d52149569b23f8b48d5770c6_190) | | | [Asset Retirement Obligations](#ibe111af6d52149569b23f8b48d5770c6_190) | | | [147](#ibe111af6d52149569b23f8b48d5770c6_190) | | |

| [12:](#ibe111af6d52149569b23f8b48d5770c6_193) | | | [Retirement Benefits](#ibe111af6d52149569b23f8b48d5770c6_193) | | | [149](#ibe111af6d52149569b23f8b48d5770c6_193) | | |

| [14:](#ibe111af6d52149569b23f8b48d5770c6_205) | | | [Income Taxes](#ibe111af6d52149569b23f8b48d5770c6_205) | | | [163](#ibe111af6d52149569b23f8b48d5770c6_205) | | |

| [16:](#ibe111af6d52149569b23f8b48d5770c6_214) | | | [Revenue](#ibe111af6d52149569b23f8b48d5770c6_214) | | | [168](#ibe111af6d52149569b23f8b48d5770c6_214) | | |

| [17:](#ibe111af6d52149569b23f8b48d5770c6_220) | | | [Other Income and Other Expense](#ibe111af6d52149569b23f8b48d5770c6_220) | | | [172](#ibe111af6d52149569b23f8b48d5770c6_220) | | |

| [18:](#ibe111af6d52149569b23f8b48d5770c6_223) | | | [Cash and Cash Equivalents](#ibe111af6d52149569b23f8b48d5770c6_223) | | | [172](#ibe111af6d52149569b23f8b48d5770c6_223) | | |

| [21:](#ibe111af6d52149569b23f8b48d5770c6_235) | | | [Variable Interest Entities](#ibe111af6d52149569b23f8b48d5770c6_235) | | | [178](#ibe111af6d52149569b23f8b48d5770c6_235) | | |

| [Consumers](#ibe111af6d52149569b23f8b48d5770c6_250) | | | | | | [186](#ibe111af6d52149569b23f8b48d5770c6_250) | | |

| Interest income – related parties | | | | | | 7 | | | | | | — | | | | | | — | | |

| | | | | | | | | | | | | | | | | | | | | |

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| | | | | | | | | | | | | | | | | | | | | |

| Settlement arising during the period, net of tax of $— for all periods | | | | | | 1 | | | | | | — | | | | | | — | | |

| Prior service credit adjustment, net of tax of $— for all periods | | | | | | (1) | | | | | | — | | | | | | (1) | | |

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| | | | | | | | | | | | | | | | | | | | | |

| Depreciation and amortization | | | | | | 1,048 | | | | | | 992 | | | | | | 933 | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| Issuance of common stock, net of issuance costs | | | | | | 253 | | | | | | 12 | | | | | | 41 | | |

| Proceeds from the sale of membership interest in VIE to tax equity investor | | | | | | 417 | | | | | | — | | | | | | — | | |

| Contribution from noncontrolling interest | | | | | | 31 | | | | | | — | | | | | | — | | |

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| | | | | | | | | | | | | | | | | | | | | |

| Notes receivable, less allowance of $32 in 2020 and $33 in 2019 | | | | | | 275 | | | | | | 242 | | |

| | | |

| --- | --- | --- |

| [16:](#sFD070EF6318E5C6FA360C6B365CA87D5) | [Revenue](#sFD070EF6318E5C6FA360C6B365CA87D5) | [163](#sFD070EF6318E5C6FA360C6B365CA87D5) |

| [Consumers](#s80F7E949277A5F2981608BDC1102FF4A) | | [180](#s80F7E949277A5F2981608BDC1102FF4A) |

| | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Notes receivable, less allowances of $33 in 2019 and $24 in 2018 | | 223 | | | | 233 | | |

| Notes receivable held for sale | | 19 | | | | — | | |

| Accrued gas revenue | | — | | | | 16 | | |

| | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Accounts and notes receivable – related parties | | 102 | | | | 104 | | |

| | |

| --- | --- |

The standard requires lessees to recognize

lease assets and liabilities on the balance sheet for all leases with a term of more than one year, including operating leases, which were not recorded on the balance sheet under previous standards.

The new guidance also amends the definition of a lease to require that a lessee have the right to control the use of a specified asset, and not simply control or take the output of the asset.

On the statement of income, operating leases are generally accounted for under a straight-line expense model, while finance leases, which were previously referred to as capital leases, are generally accounted for under a financing model.

Consistent with the previous lease guidance, however, the standard allows rate-regulated utilities to recognize expense consistent with the timing of recovery in rates.

CMS Energy and Consumers elected to use certain practical expedients permitted by the standard, under which they were not required to perform lease assessments or reassessments for agreements existing on the effective date.

They also elected a transition method under which they initially applied the standard on January 1, 2019, without adjusting amounts presented for prior periods.

Under the standard, CMS Energy and Consumers recognized additional lease assets and liabilities on their consolidated balance sheets as of January 1, 2019 for their operating leases.

In addition, in accordance with the standard, they have provided additional disclosures about their leases in Note 10, Leases and Palisades Financing.

The standard did not have any impact on CMS Energy’s and Consumers’ consolidated net income or cash flows, and there was no cumulative-effect adjustment recorded to beginning retained earnings.

New Accounting Standards Not Yet Effective

*ASU 2016*‑*13, Measurement of Credit Losses on Financial Instruments:* This standard, effective January 1, 2020 for CMS Energy and Consumers, provides new guidance for measuring and recognizing credit losses on financial instruments.

At Consumers, the new guidance will apply to the allowance for uncollectible accounts; however, Consumers does not expect material impacts from the standard.

| | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Other | | 2019 | | — | | | | 5 | | |

| Deferred capital spending4 | | various | | 3 | | | | — | | |

| Gain to be shared with customers | | 2020 | | 17 | | | | — | | |

| TCJA reserve for refund | | 2019 | | — | | | | 98 | | |

| Other | | 2020 | | 3 | | | | 3 | | |

| TCJA reserve for refund | | various | | — | | | | 35 | | |

Gas Storage Inventory Adjustments: Consumers incurs inventory expenses related to the loss of gas from its natural gas storage fields.

The MPSC allows Consumers to recover these costs from its natural gas customers over a five\-year period.

Reserve for Customer Refunds: At December 31, 2018, Consumers had recorded a provision for revenue subject to refund associated with electric rates it self-implemented in 2017.

Based on such evaluation, CMS Energy’s CEO and CFO have concluded that its disclosure controls and procedures were effective as of December 31, [removed: 2019.][added: 2020.]

[removed: | • |] [added: -] pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of CMS Energy [removed: |]

[removed: | • |] [added: -] provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of CMS Energy are being made only in accordance with authorizations of management and directors of CMS Energy [removed: |]

[removed: | • |] [added: -] provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of CMS Energy’s assets that could have a material effect on its financial statements [removed: |]

Under the supervision and with the participation of management, including its CEO and CFO, CMS Energy conducted an evaluation of the effectiveness of its internal control over financial reporting as of December 31, [removed: 2019.][added: 2020.]

Based on such evaluation, CMS Energy’s management concluded that its internal control over financial reporting was effective as of December 31, [removed: 2019.][added: 2020.]

The effectiveness of CMS Energy’s internal control over financial reporting as of December 31, [removed: 2019] [added: 2020] has [removed: been]

[added: been] audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears under Item 8.

Based on such evaluation, Consumers’ CEO and CFO have concluded that its disclosure controls and procedures were effective as of December 31, [removed: 2019.][added: 2020.]

[removed: | • |] [added: -] pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of Consumers [removed: |]

[removed: | • |] [added: -] provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of Consumers are being made only in accordance with authorizations of management and directors of Consumers [removed: |]

[removed: | • |] [added: -] provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of Consumers’ assets that could have a material effect on its financial statements [removed: |]

Under the supervision and with the participation of management, including its CEO and CFO, Consumers conducted an evaluation of the effectiveness of its internal control over financial reporting as of December 31, [removed: 2019.][added: 2020.]

Based on such evaluation, Consumers’ management concluded that its internal control over financial reporting was effective as of December 31, [removed: 2019.][added: 2020.]

The effectiveness of Consumers’ internal control over financial reporting as of December 31, [removed: 2019] [added: 2020] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears under Item 8.

| | |

| --- | --- |

Information that is required in Item 10 of this Form 10‑K regarding directors, executive officers, and corporate governance is incorporated by reference from CMS Energy’s and Consumers’ definitive proxy statement for their [removed: 2020] [added: 2021] Annual Meetings of Shareholders to be held May [removed: 1, 2020.][added: 7, 2021.]

CMS Energy has adopted an employee code of ethics, entitled “CMS Energy [removed: 2020] [added: 2021] Code of Conduct” (“Employee Code”) that applies to its CEO, CFO, and CAO, as well as all other officers and employees of CMS Energy and its affiliates, except for EnerBank, which has its own code of conduct.

CMS Energy has also adopted a director code of ethics entitled [removed: “2020] [added: “2021] Board of Directors Code of Conduct” (“Director Code”) that applies to its directors.

Consumers has adopted an employee code of ethics, entitled “CMS Energy [removed: 2020] [added: 2021] Code of Conduct” (“Employee Code”) that applies to its CEO, CFO, and CAO, as well as all other officers and employees of Consumers and its affiliates, except for EnerBank, which has its own code of conduct.

Consumers has also adopted a director code of ethics entitled [removed: “2020] [added: “2021] Board of Directors Code of Conduct” (“Director Code”) that applies to its directors.

Information that is required in Item 10 of this Form 10‑K regarding directors, executive officers, and corporate governance is incorporated by reference from CMS Energy’s and Consumers’ definitive proxy statement for their 2021 Annual Meetings of Shareholders to be held May 7, 2021.

Presented in the following table is information regarding CMS Energy’s equity compensation plans as of December 31, [removed: 2019:][added: 2020:]

| Plan Category | [added: | |] Number of securities to be issued upon exercise of outstanding options, warrants, and rights | | [added: |] Weighted-average exercise price of outstanding options, warrants, and rights | | | | [added: | |] Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | | [added: |]

| Equity compensation plan approved by shareholders | [added: | |] — | | | [added: | | |] $ | — | | [removed: 3,258,000] [added: 6,477,579] | | [added: |]

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | (a) | | | (b) | | | | | | (c) | | |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | (a) | | (b) | | | | (c) | |

NOTE: Information that is required by Part III—Items 11, 12, 13, and 14 of this Form 10‑K is incorporated by reference from CMS Energy’s and Consumers’ definitive proxy statement for their [removed: 2020] [added: 2021] Annual Meetings of Shareholders to be held May [removed: 1, 2020.][added: 7, 2021.]

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[removed: | • |] [added: -] Consolidated Statements of Income of CMS Energy for the years ended December 31, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017 |][added: 2018]

[removed: | • |] [added: -] Consolidated Statements of Comprehensive Income of CMS Energy for the years ended December 31, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017 |][added: 2018]

[removed: | • |] [added: -] Consolidated Statements of Cash Flows of CMS Energy for the years ended December 31, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017 |][added: 2018]

[removed: | • |] [added: -] Consolidated Balance Sheets of CMS Energy at December 31, [removed: 2019] [added: 2020] and [removed: 2018 |][added: 2019]