CMS ENERGY CORPORATION METC
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Table of Contents MGP Manufactured gas plant MIOSHA
MISO
mothball
To place a generating unit into a state of extended reserve shutdown in which the unit is inactive and unavailable for service for a specified period, during which the unit can be brought back into service after receiving appropriate notification and completing any necessary maintenance or other work; generation owners in MISO must request approval to mothball a unit, and MISO then evaluates the request for reliability impacts
MPSC
Michigan
MW
Megawatt, a unit of power equal to one million watts
NAAQS
National Ambient Air Quality Standards
NPDES
National Pollutant Discharge Elimination System, a permit system for regulating point sources of pollution under the Clean Water Act
NREPA
Part 201 of Michigan's Natural Resources and Environmental Protection Act of 1994, as amended
NSR
New Source Review, a construction-permitting program under the Clean Air Act
OPEB
Other Post-Employment Benefits
OPEB Plan
Postretirement health care and life insurance plans of
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Table of ContentsOSHA TheOccupational Safety and Health Administration
PCB
Polychlorinated biphenyl
PHMSA
PPA Power purchase agreement PSCR Power supply cost recovery
PURPA
The Public Utility Regulatory Policies Act of 1978
RCRA
The Federal Resource Conservation and Recovery Act of 1976
REC
Renewable energy credit
Regions Bank A subsidiary of Regions Financial Corporation, a non-affiliated company
ROA
Retail Open Access, which allows electric generation customers to choose alternative electric suppliers pursuant to Michigan's Public Acts 141 and 142 of 2000, as amended
securitization
A financing method authorized by statute and approved by the MPSC which allows a utility to sell its right to receive a portion of the rate payments received from its customers for the repayment of securitization bonds issued by a special-purpose entity affiliated with such utility
TCJA
Tax Cuts and Jobs Act of 2017
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Table of Contents T.E.S.Filer City T.E.S. Filer City Station Limited Partnership , a VIE in which HYDRACO Enterprises, Inc., a wholly owned subsidiary ofCMS Enterprises , has a 50-percent interest VIE Variable interest entity 8
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Table of Contents Filing Format This combined Form 10-Q is separately filed byCMS Energy and Consumers. Information in this combined Form 10-Q relating to each individual registrant is filed by such registrant on its own behalf. Consumers makes no representation regarding information relating to any other companies affiliated withCMS Energy other than its own subsidiaries.CMS Energy is the parent holding company of several subsidiaries, includingConsumers and CMS Enterprises .CMS Energy was also the parent holding company of EnerBank untilOctober 1, 2021 when EnerBank was merged withRegions Bank . None ofCMS Energy ,CMS Enterprises , EnerBank, nor any ofCMS Energy's other subsidiaries (other than Consumers) has any obligation in respect of Consumers' debt securities or preferred stock and holders of such securities should not consider the financial resources or results of operations ofCMS Energy ,CMS Enterprises , EnerBank, nor any ofCMS Energy's other subsidiaries (other than Consumers and its own subsidiaries (in relevant circumstances)) in making a decision with respect to Consumers' debt securities or preferred stock. Similarly, neither Consumers nor any other subsidiary ofCMS Energy has any obligation in respect of securities ofCMS Energy . This report should be read in its entirety. No one section of this report deals with all aspects of the subject matter of this report. This report should be read in conjunction with the consolidated financial statements and related notes and with MD&A included in the 2020 Form 10-K. Available InformationCMS Energy's internet address is www.cmsenergy.com.CMS Energy routinely posts important information on its website and considers the Investor Relations section, www.cmsenergy.com/investor-relations, a channel of distribution. Information contained onCMS Energy's website is not incorporated herein. Forward-Looking Statements and Information This Form 10Q and otherCMS Energy and Consumers disclosures may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. The use of "might," "may," "could," "should," "anticipates," "believes," "estimates," "expects," "intends," "plans," "projects," "forecasts," "predicts," "assumes," and other similar words is intended to identify forward-looking statements that involve risk and uncertainty. This discussion of potential risks and uncertainties is designed to highlight important factors that may impactCMS Energy's and Consumers' businesses and financial outlook.CMS Energy and Consumers have no obligation to update or revise forward-looking statements regardless of whether new information, future events, or any other factors affect the information contained in the statements. These forward-looking statements are subject to various factors that could causeCMS Energy's and Consumers' actual results to differ materially from the results anticipated in these statements. These factors include, but are not limited to, the following, all of which are potentially significant: •the impact and effect of the COVID-19 pandemic, the response to the COVID-19 pandemic, and the related economic disruption onCMS Energy's and Consumers' workforce, operations, revenues, expenses, uncollectible accounts, energy efficiency programs, pension funding, PSCR and GCR costs, capital investment programs, cash flows, liquidity, maintenance of existing assets, and other operating expenses 9
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Table of Contents •the impact of new regulation by the MPSC,FERC , and other applicable governmental proceedings and regulations, including any associated impact on electric or gas rates or rate structures •potentially adverse regulatory treatment or failure to receive timely regulatory orders affecting Consumers that are or could come before the MPSC,FERC , or other governmental authorities •changes in the performance of or regulations applicable to MISO, METC, pipelines, railroads, vessels, or other service providers thatCMS Energy , Consumers, or any of their affiliates rely on to serve their customers •the adoption of or challenges to federal or state laws or regulations or changes in applicable laws, rules, regulations, principles, or practices, or in their interpretation, such as those related to energy policy, ROA, PURPA, infrastructure integrity or security, cybersecurity, gas pipeline safety, gas pipeline capacity, energy waste reduction, the environment, regulation or deregulation, reliability, COVID-19 vaccination and testing requirements, health care reforms (including comprehensive health care reform enacted in 2010), taxes, accounting matters, climate change, air emissions, renewable energy, the Dodd-Frank Act, and other business issues that could have an impact onCMS Energy's , Consumers', or any of their affiliates' businesses or financial results •factors affecting operations, such as costs and availability of personnel, equipment, and materials; weather conditions; natural disasters; catastrophic weather-related damage; scheduled or unscheduled equipment outages; maintenance or repairs; environmental incidents; failures of equipment or materials; electric transmission and distribution or gas pipeline system constraints; interconnection requirements; political and social unrest; general strikes; the government and/or paramilitary response to political or social events; and changes in trade policies or regulations •the ability of Consumers to execute its cost-reduction strategies •potentially adverse regulatory or legal interpretations or decisions regarding environmental matters, or delayed regulatory treatment or permitting decisions that are or could come before EGLE, theEPA , and/or theU.S. Army Corps of Engineers , and potential environmental remediation costs associated with these interpretations or decisions, including those that may affect Consumers' routine maintenance, repair, and replacement classification under NSR regulations •changes in energy markets, including availability and price of electric capacity and the timing and extent of changes in commodity prices and availability and deliverability of coal, natural gas, natural gas liquids, electricity, oil, gasoline, diesel fuel, and certain related products •the price ofCMS Energy common stock, the credit ratings ofCMS Energy and Consumers, capital and financial market conditions, and the effect of these market conditions onCMS Energy's and Consumers' interest costs and access to the capital markets, including availability of financing toCMS Energy , Consumers, or any of their affiliates •the potential effects of the future transition from LIBOR to an alternative reference interest rate in the credit and capital markets •the investment performance of the assets ofCMS Energy's and Consumers' pension and benefit plans, the discount rates, mortality assumptions, and future medical costs used in calculating the plans' obligations, and the resulting impact on future funding requirements 10
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Table of Contents •the impact of the economy, particularly inMichigan , and potential future volatility in the financial and credit markets onCMS Energy's , Consumers', or any of their affiliates' revenues, ability to collect accounts receivable from customers, or cost and availability of capital •changes in the economic and financial viability ofCMS Energy's and Consumers' suppliers, customers, and other counterparties and the continued ability of these third parties, including those in bankruptcy, to meet their obligations toCMS Energy and Consumers •population changes in the geographic areas whereCMS Energy and Consumers conduct business •national, regional, and local economic, competitive, and regulatory policies, conditions, and developments •loss of customer demand for electric generation supply to alternative electric suppliers, increased use of self-generation including distributed generation, or energy waste reduction and storage •increased renewable energy demand due to customers seeking to meet their own sustainability goals •the reputational or other impact onCMS Energy and Consumers of the failure to achieve ambitions related to reducing their impact on climate change •adverse consequences of employee, director, or third-party fraud or noncompliance with codes of conduct or with laws or regulations •federal regulation of electric sales, including periodic reexamination by federal regulators ofCMS Energy's and Consumers' market-based sales authorizations •any event, change, development, occurrence, or circumstance that could impact the 2021 IRP filing or give rise to the termination of the associated purchase agreements, including any action by a regulatory authority or other third party to prohibit, delay, impair, or deny approval for or consent to the 2021 IRP or the consummation of the proposed acquisitions •the availability, cost, coverage, and terms of insurance, the stability of insurance providers, and the ability of Consumers to recover the costs of any insurance from customers •the effectiveness ofCMS Energy's and Consumers' risk management policies, procedures, and strategies, including strategies to hedge risk related to interest rates and future prices of electricity, natural gas, and other energy-related commodities •factors affecting development of electric generation projects, gas transmission, gas and electric distribution infrastructure replacement, conversion, and expansion projects, including factors related to project site identification, construction material pricing, schedule delays, availability of qualified construction personnel, permitting, acquisition of property rights, and government approvals •potential disruption to, interruption of, or other impacts on facilities, utility infrastructure, operations, or backup systems due to accidents, explosions, physical disasters, global pandemics, cyber incidents, civil unrest, vandalism, war, or terrorism, and the ability to obtain or maintain insurance coverage for these events •changes or disruption in fuel supply, including but not limited to supplier bankruptcy and delivery disruptions 11
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Table of Contents •potential costs, lost revenues, reputational harm, or other consequences resulting from misappropriation of assets or sensitive information, corruption of data, or operational disruption in connection with a cyber attack or other cyber incident •potential disruption to, interruption or failure of, or other impacts on information technology backup or disaster recovery systems •technological developments in energy production, storage, delivery, usage, and metering •the ability to implement technology successfully •the impact ofCMS Energy's and Consumers' integrated business software system and its effects on their operations, including utility customer billing and collections •adverse consequences resulting from any past, present, or future assertion of indemnity or warranty claims associated with assets and businesses previously owned byCMS Energy or Consumers, including claims resulting from attempts by foreign or domestic governments to assess taxes on or to impose environmental liability associated with past operations or transactions •the outcome, cost, and other effects of any legal or administrative claims, proceedings, investigations, or settlements •the reputational impact onCMS Energy and Consumers of operational incidents, violations of corporate policies, regulatory violations, inappropriate use of social media, and other events •restrictions imposed by various financing arrangements and regulatory requirements on the ability of Consumers and other subsidiaries ofCMS Energy to transfer funds toCMS Energy in the form of cash dividends, loans, or advances •earnings volatility resulting from the application of fair value accounting to certain energy commodity contracts or interest rate contracts •changes in financial or regulatory accounting principles or policies (e.g., the adoption of the hypothetical liquidation at book value method of accounting for certain non-regulated renewable energy projects) •other matters that may be disclosed from time to time inCMS Energy's and Consumers'SEC filings, or in other public documents All forward-looking statements should be considered in the context of the risk and other factors described above and as detailed from time to time inCMS Energy's and Consumers'SEC filings. For additional details regarding these and other uncertainties, see Part I-Item 1. Financial Statements-MD&A-Outlook and Notes to the Unaudited Consolidated Financial Statements-Note 1, Regulatory Matters and Note 2, Contingencies and Commitments; and Part II-Item 1A. Risk Factors. 12
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Table of Contents
Part I-Financial Information
Item 1. Financial Statements
Index to Financial Statements
Management's Discussion and Analysis of Financial Condition and Results of Operations 14
CMS Energy Consolidated Financial Statements 46
Consolidated Statements of Income (Unaudited) 46
Consolidated Statements of Comprehensive Income (Unaudited) 48
Consolidated Statements of Cash Flows (Unaudited) 50
Consolidated Balance Sheets (Unaudited) 52
Consolidated Statements of Changes in Equity (Unaudited) 54
Consumers Consolidated Financial Statements 56
Consolidated Statements of Income (Unaudited) 56
Consolidated Statements of Comprehensive Income (Unaudited) 57
Consolidated Statements of Cash Flows (Unaudited) 59
Consolidated Balance Sheets (Unaudited) 60
Consolidated Statements of Changes in Equity (Unaudited) 62
Notes to the Unaudited Consolidated Financial Statements 63
1: Regulatory Matters 63
2: Contingencies and Commitments 64
3: Financings and Capitalization 69
4: Fair Value Measurements 71
5: Financial Instruments 74
6: Retirement Benefits 75
7: Income Taxes 76
8: Earnings Per Share-CMS Energy 77
9: Revenue 78
10: Cash and Cash Equivalents 82
11: Reportable Segments 83
12: Variable Interest Entities 86
13: Exit Activities and Discontinued Operations 88
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Table of ContentsCMS Energy Corporation Consumers Energy Company Management's Discussion and Analysis of Financial Condition and Results of Operations This MD&A is a combined report ofCMS Energy and Consumers. Executive OverviewCMS Energy is an energy company operating primarily inMichigan . It is the parent holding company of several subsidiaries, including Consumers, an electric and gas utility; andCMS Enterprises , primarily a domestic independent power producer and marketer.CMS Energy was also the parent holding company of EnerBank, an industrial bank located inUtah , untilOctober 1, 2021 when EnerBank was merged withRegions Bank as described below. Consumers' electric utility operations include the generation, purchase, distribution, and sale of electricity, and Consumers' gas utility operations include the purchase, transmission, storage, distribution, and sale of natural gas. Consumers' customer base consists of a mix of primarily residential, commercial, and diversified industrial customers.CMS Enterprises , through its subsidiaries and equity investments, is engaged in domestic independent power production, including the development and operation of renewable generation, and the marketing of independent power production. EnerBank provides primarily unsecured, fixed-rate installment loans throughout theU.S. to finance home improvements. InJune 2021 ,CMS Energy entered into an agreement for EnerBank to merge withRegions Bank . The merger was completed onOctober 1, 2021 .CMS Energy received proceeds of approximately$1.0 billion from the transaction and expects to recognize a pre-tax gain of approximately$660 million in the fourth quarter of 2021, both of which may be impacted by customary post-closing adjustments.CMS Energy intends to use the proceeds from the merger to fund key initiatives in its core energy business related to safety, reliability, and its clean energy transformation.CMS Energy and Consumers manage their businesses by the nature of services each provides.CMS Energy operates principally in three business segments: electric utility; gas utility; and enterprises, its nonutility operations and investments. EnerBank is not included in the composition ofCMS Energy's reportable segments. EnerBank's results of operations are presented as income from discontinued operations as a result of the merger described above. Consumers operates principally in two business segments: electric utility and gas utility.CMS Energy's and Consumers' businesses are affected primarily by: •regulation and regulatory matters •state and federal legislation •economic conditions •weather •energy commodity prices •interest rates •their securities' credit ratings 14
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Table of Contents The Triple Bottom LineCMS Energy's and Consumers' purpose is to achieve world class performance while delivering hometown service. In support of this purpose, the companies employ the "CE Way ," a lean operating model designed to improve safety, quality, cost, delivery, and employee morale.CMS Energy and Consumers measure their progress toward the purpose by considering their impact on the "triple bottom line" of people, planet, and profit, which is underpinned by performance; this consideration takes into account not only the economic value that the companies create for customers and investors, but also their responsibility to social and environmental goals. The triple bottom line balances the interests of the companies' employees, customers, suppliers, regulators, creditors,Michigan's residents, the investment community, and other stakeholders, and it reflects the broader societal impacts of the companies' activities. [[Image Removed: cms-20210930_g1.jpg]] Consumers' Sustainability Report, which is available to the public, describes the company's progress toward world class performance measured in the areas of people, planet, and profit. People: The people element of the triple bottom line representsCMS Energy's and Consumers' commitment to their employees, their customers, the residents of local communities in which the companies do business, and other stakeholders. The safety of employees, customers, and the general public is a priority ofCMS Energy and Consumers. Accordingly,CMS Energy and Consumers have worked to integrate a set of safety principles into their business operations and culture. These principles include complying with applicable safety, health, and security regulations and implementing programs and processes aimed at continually improving safety and security conditions. Since 2010, Consumers'OSHA recordable incident rate has decreased by over 53 percent. 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 theCDC ,OSHA , MIOSHA, and theMichigan 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: •worked with local health departments and hospital systems to facilitate and encourage employee vaccinations •implemented policies for employees entering homes or businesses to protect them, customers, and the public •implemented plans to safely provide access to company facilities and put into practice enhanced cleaning protocols 15
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Table of Contents •provided paid leave to employees required to self-quarantine, 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 •developed programs and committed resources to assist customers,Michigan residents, and small businesses as they return to normal operations In addition, whileCMS Energy and Consumers have not yet experienced significant labor or supply chain disruption as a result of the COVID-19 pandemic, they continue to monitor and take steps to mitigate against future impacts in order to continue to provide safe and reliable service to customers.CMS Energy and Consumers also place a high priority on customer value and on providing a hometown customer experience. Consumers' customer-driven investment program is aimed at improving safety and increasing electric and gas reliability, which has resulted in measurable improvements in customer satisfaction. Central to Consumers' commitment to its customers are the initiatives it has undertaken to keep electricity and natural gas affordable, including: •replacement of coal-fueled generation and PPAs with a cost-efficient mix of renewable energy and energy waste reduction and demand response programs •targeted infrastructure investment to reduce maintenance costs and improve reliability and safety •supply chain optimization •information and control system efficiencies •employee and retiree health care cost sharing •workforce productivity enhancements In addition, Consumers' gas commodity costs declined by 60 percent over the last ten years, 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. These gas commodity savings are passed on to customers. Planet: The planet element of the triple bottom line representsCMS Energy's and Consumers' commitment to protect the environment. This commitment extends beyond compliance with various state and federal environmental, health, and safety laws and regulations. Management considers climate change and other environmental risks in the companies' strategy development, business planning, and enterprise risk management processes.CMS Energy and Consumers continue to focus on opportunities to protect the environment and to reduce their carbon footprint. As a result of actions already taken byCMS Energy and Consumers, the companies have: •decreased their combined percentage of electric supply (self-generated and purchased) from coal by 21 percentage points since 2015 •reduced carbon dioxide emissions by over 35 percent since 2005 •reduced the amount of water used to generate electricity by over 30 percent since 2012 •reduced landfill waste disposal by over 1.5 million tons since 1992 •reduced methane emissions by 16 percent since 2012 Additionally, Consumers has reduced its sulfur dioxide, nitrogen oxide, particulate matter, and mercury emissions by approximately 90 percent since 2005. 16
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Table of Contents The 2016 Energy Law: •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 and 2020 and expects to meet the 15-percent requirement in 2021 and future years with a combination of newly generated RECs and previously generated RECs carried over from prior years •established a goal of 35 percent combined renewable energy and energy waste reduction by 2025; Consumers achieved 25 percent combined renewable energy and energy waste reduction through 2020 •authorized incentives for demand response programs and energy efficiency programs, referring to the combined initiatives as energy waste reduction programs •established an integrated planning process for new generation resources Consumers' Clean Energy Plan details its strategy to meet customers' long-term energy needs. The Clean Energy Plan was originally outlined in Consumers' 2018 IRP, which was approved by the MPSC in 2019. Under its Clean Energy Plan, Consumers will meet the requirements of the 2016 Energy Law using its clean and lean strategy, which focuses on increasing the generation of renewable energy, helping customers use less energy, and offering demand response programs to reduce demand during critical peak times. InJune 2021 , Consumers filed its 2021 IRP with the MPSC, proposing updates to the Clean Energy Plan. Within its 2021 IRP, which is subject to MPSC approval, Consumers outlines its long-term strategy for delivering clean, reliable, resilient, and affordable energy to its customers, including plans to: •end the use of coal-fueled generation in 2025, 15 years sooner than initially planned •purchase existing natural gas-fueled generating units, providing an additional 2,177 MW of nameplate capacity and allowing Consumers to continue providing controllable sources of electricity to customers, and •expand its investment in renewable energy, adding nearly 8,000 MW of solar generation by 2040 These steps are expected to enable Consumers to meet and exceed the 2016 Energy Law renewable energy requirements and fulfill increasing customer demand for renewable energy. The 2021 IRP is also expected to allow Consumers to exceed its breakthrough goal of at least 50 percent combined renewable energy and energy waste reduction by 2030. Consumers has 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. Consumers expects to meet 90 percent of its customers' needs with clean energy sources by 2040 through execution of its 2021 IRP. Carbon offset measures including, but not limited to, carbon sequestration, methane emission capture, and forest preservation and reforestation may be used to close the gap to achieving net-zero carbon emissions. 17
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Table of Contents Presented in the following illustration is Consumers' 2020 capacity portfolio and its future capacity portfolio as projected in the 2021 IRP. This illustration includes the effects of purchased capacity and energy waste reduction and uses the nameplate capacity of renewable energy sources:
[[Image Removed: cms-20210930_g2.jpg]]
1 Does not include RECs.
In September 2020 , Michigan's Governor signed an executive order creating the
Michigan Healthy Climate Plan, which outlines goals for Michigan to achieve
economy-wide net-zero greenhouse gas emissions and to be carbon neutral by 2050.
The executive order aims for a 28-percent reduction below 2005 levels of
greenhouse gas emissions by 2025. Consumers has already surpassed the 28-percent
reduction milestone for its owned electric generation and previously announced a
goal of achieving net-zero carbon emissions from its electric business by 2040.
In addition to Consumers' efforts to reduce the electric utility's carbon
footprint, it is also making efforts to reduce the gas utility's methane
footprint. In 2019, Consumers released its Methane Reduction Plan, which set a
goal of net-zero methane emissions from its natural gas delivery system by 2030.
Consumers plans to reduce methane emissions from its system by about 80 percent
by accelerating the replacement of aging pipe, rehabilitating or retiring
outdated infrastructure, and adopting new technologies and practices. The
remaining emissions will be offset by purchasing and/or producing renewable
natural gas.
Additionally, to advance its environmental stewardship in Michigan and to
minimize the impact of future regulations, Consumers announced the following
fiveyear targets during 2018:
•to reduce its water use by one billion gallons
•to enhance, restore, or protect 5,000 acres of land
•to reduce the amount of waste taken to landfills by 35 percent
Consumers has met each of these targets and is evaluating new targets for the
coming years.
CMS Energy and Consumers are monitoring numerous legislative, policy, and
regulatory initiatives, including those to regulate greenhouse gases, and
related litigation. While CMS Energy and Consumers
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Table of Contents cannot predict the outcome of these matters, which could have a material effect on the companies, they intend to continue to move forward with their clean and lean strategy. Profit: The profit element of the triple bottom line representsCMS Energy's and Consumers' commitment to meeting their financial objectives and providing economic development opportunities and benefits in the communities in which they do business.CMS Energy's and Consumers' financial strength allows them to maintain solid investment-grade credit ratings and thereby reduce funding costs for the benefit of customers and investors, to preserve and create jobs, and to reinvest in the communities they serve. For the nine months endedSeptember 30, 2021 ,CMS Energy's net income available to common stockholders was$711 million , and diluted EPS were$2.46 . This compares with net income available to common stockholders of$597 million and diluted EPS of$2.09 for the nine months endedSeptember 30, 2020 . In 2021, the benefits from gas and electric rate increases and higher electric sales were offset partially by higher distribution, transmission, generation, and compression expenses and increased depreciation and property taxes, reflecting higher capital spending. A more detailed discussion of the factors affectingCMS Energy's and Consumers' performance can be found in the Results of Operations section that follows this Executive Overview. Over the next five years, Consumers expects weather-normalized electric and gas deliveries to remain stable relative to 2020. This outlook reflects the effects of energy waste reduction programs offset largely by modest growth in electric and gas demand. Performance: Impacting the Triple Bottom LineCMS Energy and Consumers remain committed to achieving world class performance while delivering hometown service and positively impacting the triple bottom line of people, planet, and profit. During 2021,CMS Energy and Consumers: •realized over$40 million in cost reductions by leveraging theCE Way and through other initiatives •achieved five-year planet goals, set in 2018, to save one billion gallons of water; enhance, restore or protect 5000 acres of land inMichigan ; and reduce waste sent to landfills by 35 percent •introduced a new three-year electric vehicle pilot program designed to help fleet owners transition to electric vehicles •expanded their renewable energy programs that assist both business and residential customers in meeting their sustainability goals •received recognition as #1 utility company in theU.S. for America's Best Employers for Women and America's Best Employers for Diversity by Forbes®CMS Energy and Consumers will continue to utilize theCE Way to enable them to achieve world class performance and positively impact the triple bottom line. Consumers' investment plan and the regulatory environment in which it operates also drive its ability to impact the triple bottom line. Investment Plan: Consumers expects to make capital investments of$25 billion over the next ten years. Over the next five years, Consumers expects to make significant expenditures on infrastructure upgrades and replacements and electric supply projects. While it has a large number of potential investment opportunities that would add customer value, Consumers has prioritized its spending based on the criteria of enhancing public safety, increasing reliability, maintaining affordability for its customers, and advancing its environmental stewardship. Consumers' investment program is expected to result in annual rate-base growth of six to eight percent. This rate-base growth, together with cost-control measures, should allow Consumers to maintain affordable customer prices. 19
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Table of Contents
The 2021 IRP, which is subject to approval, would add over
[[Image Removed: cms-20210930_g3.jpg]]
Of this amount, Consumers plans to spend
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Table of Contents Looking ForwardCMS Energy and Consumers will continue to consider the impact on the triple bottom line of people, planet, and profit in their daily operations as well as in their long-term strategic decisions. Consumers will continue to seek fair and timely regulatory treatment that will support its customer-driven investment plan, while pursuing cost-control measures that will allow it to maintain sustainable customer base rates.The CE Way is an important means of realizingCMS Energy's and Consumers' purpose of achieving world class performance while delivering hometown service. 21
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