Management&apos;s Discussion and Analysis of Financial Condition and Results of Operations

MGP

Manufactured gas plant

MISO

Midcontinent Independent System Operator, Inc.

mothball

To place a generating unit into a state of extended reserve shutdown in which the unit is
inactive and unavailable for service for a specified period, during which the unit can be
brought back into service after receiving appropriate notification and completing any
necessary maintenance or other work; generation owners in MISO must request approval to
mothball a unit, and MISO then evaluates the request for reliability impacts

MPSC

Michigan Public Service Commission

Megawatt, a unit of power equal to one million watts

NAAQS

National Ambient Air Quality Standards


New Covert Generating Facility
A 1,176-MW natural gas-fueled generating unit that is expected to be acquired by Consumers
in May 2023 and is presently operated by New Covert Generating Company, LLC, a
non-affiliated company


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NorthStar Clean Energy
NorthStar Clean Energy Company, a wholly owned subsidiary of CMS Energy, formerly known as
CMS Enterprises Company

NOx
Nitrogen oxides

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


NWO Holdco
NWO Holdco, L.L.C., a VIE in which NWO Holdco I, LLC, a wholly owned subsidiary of Grand
River Wind, LLC, a wholly owned subsidiary of NorthStar Clean Energy, holds a Class B
membership interest

OPEB

Other Post-Employment Benefits


OPEB Plan
Postretirement health care and life insurance plans of CMS Energy and Consumers, including
certain present and former affiliates and subsidiaries

PCB
Polychlorinated biphenyl

PPA
Power purchase agreement

PSCR
Power supply cost recovery

RCRA

Federal Resource Conservation and Recovery Act of 1976

REC

Renewable energy credit

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

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SEC
U.S. Securities and Exchange Commission

securitization

A financing method authorized by statute and approved by the MPSC which allows a utility to
sell its right to receive a portion of the rate payments received from its customers for the
repayment of securitization bonds issued by a special-purpose entity affiliated with such
utility

SOFR

Secured overnight financing rate calculated and published by the Federal Reserve Bank of New
York and selected as the recommended alternative to replace LIBOR for dollar-denominated
financial contracts by the Alternative Reference Rates Committee

TAES

Toshiba America Energy Systems Corporation, a non-affiliated company

TCJA

Tax Cuts and Jobs Act of 2017


T.E.S. Filer City
T.E.S. Filer City Station Limited Partnership, a VIE in which HYDRACO Enterprises, Inc., a
wholly owned subsidiary of NorthStar Clean Energy, has a 50-percent interest

VIE
Variable interest entity


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Filing Format

This combined Form 10Q is separately filed by CMS Energy and Consumers.
Information in this combined Form 10Q relating to each individual registrant is
filed by such registrant on its own behalf. Consumers makes no representation
regarding information relating to any other companies affiliated with CMS Energy
other than its own subsidiaries.

CMS Energy is the parent holding company of several subsidiaries, including
Consumers and NorthStar Clean Energy. None of CMS Energy, NorthStar Clean
Energy, nor any of CMS 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 of CMS Energy, NorthStar Clean Energy, nor any of
CMS Energy's other subsidiaries (other than Consumers and its own subsidiaries
(in relevant circumstances)) in making a decision with respect to Consumers'
debt securities or preferred stock. Similarly, neither Consumers nor any other
subsidiary of CMS Energy has any obligation in respect of securities of
CMS 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 2022 Form 10-K.

Available Information


CMS 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 for
material information. Information contained on CMS Energy's website is not
incorporated herein.

Forward-Looking Statements and Information


This Form 10Q and other CMS 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 impact CMS Energy's and Consumers' businesses and financial outlook.
CMS Energy and Consumers have no obligation to update or revise forward-looking
statements regardless of whether new information, future events, or any other
factors affect the information contained in the statements. These
forward-looking statements are subject to various factors that could cause
CMS Energy's and Consumers' actual results to differ materially from the results
anticipated in these statements. These factors include, but are not limited to,
the following, all of which are potentially significant:

•the impact and effect of recent events, such as worsening trade relations and
geopolitical tensions with China, and the responses to these events, and related
economic disruptions including, but not limited to, labor shortages, inflation,
and supply chain disruptions

•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

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

•changes in the performance of or regulations applicable to MISO, Michigan
Electric Transmission Company, LLC (a nonaffiliated company), pipelines,
railroads, vessels, or other service providers that CMS Energy, Consumers, or
any of their affiliates rely on to serve their customers

•the adoption of 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, the Public
Utility Regulatory Policies Act of 1978, infrastructure integrity or security,
cybersecurity, gas pipeline safety, gas pipeline capacity, energy waste
reduction, the environment, regulation or deregulation, reliability, 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 on
CMS 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 and climate conditions; natural disasters;
catastrophic weather-related damage; scheduled or unscheduled equipment outages;
maintenance or repairs; contractor performance; 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

•increased frequency or intensity of storms and other adverse weather events due
to climate change that could negatively impact infrastructure owned by
CMS Energy or Consumers

•the ability of CMS Energy and Consumers to execute 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 agencies such as EGLE, the EPA, FERC, and/or the
U.S. Army Corps of Engineers, and potential environmental remediation costs
associated with these interpretations or decisions, including those that may
affect Consumers' coal ash management or routine maintenance, repair, and
replacement classification under New Source Review, a construction-permitting
program under the Clean Air Act

•changes in energy markets, including availability, price, and seasonality 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 of CMS Energy common stock, the credit ratings of CMS Energy and
Consumers, capital and financial market conditions, and the effect of these
market conditions on CMS Energy's and Consumers' interest costs and access to
the capital markets, including availability of financing to CMS Energy,
Consumers, or any of their affiliates

•the potential effects on the credit and capital markets of the transition from
LIBOR to an alternative reference interest rate, including SOFR, which may
perform differently than LIBOR and could result in increased interest rate
expense

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•the investment performance of the assets of CMS 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

•the impact of the economy, particularly in Michigan, and potential future
volatility in the financial and credit markets on CMS Energy's, Consumers', or
any of their affiliates' revenues, ability to collect accounts receivable from
customers, or cost and availability of capital

•changes in the economic and financial viability of CMS Energy's and Consumers'
suppliers, customers, and other counterparties and the continued ability of
these third parties, including those in bankruptcy, to meet their obligations to
CMS Energy and Consumers

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

•national, regional, and local economic, competitive, and regulatory policies,
conditions, and developments


•loss of customer demand for electric generation supply to alternative electric
suppliers, increased use of self-generation including distributed generation,
energy waste reduction, or energy storage

•loss of customer demand for natural gas due to alternative technologies or
fuels

•restricted ability to construct natural gas infrastructure due to environmental
regulations or other governmental action


•ability of Consumers to meet increased renewable energy demand due to customers
seeking to meet their own sustainability goals in a timely and cost-efficient
manner

•the reputational or other impact on CMS Energy and Consumers of the failure to
achieve greenhouse gas reduction goals 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 of CMS Energy's and Consumers' market-based sales
authorizations

•any event, change, development, occurrence, or circumstance that could impact
the implementation of the Clean Energy Plan, including any action by a
regulatory authority or other third party to prohibit, delay, or impair the
implementation of the Clean Energy Plan


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

•the effectiveness of CMS Energy's and Consumers' risk management policies,
procedures, and strategies, including strategies to hedge risk related to
interest rates and future prices of electricity, natural gas, and other
energy-related commodities


•factors affecting development of electric generation projects, gas
transmission, and gas and electric distribution infrastructure replacement,
conversion, and expansion projects, including factors related to project site
identification, construction material pricing, schedule delays, availability of
qualified construction personnel, permitting, acquisition of property rights,
community opposition, and government approvals

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•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


•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 cyberattack 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 of CMS Energy's and Consumers' integrated business software system
and its effects on their operations, including utility customer billing and
collections


•adverse consequences resulting from any past, present, or future assertion of
indemnity or warranty claims associated with assets and businesses previously
owned by CMS Energy or Consumers, including claims resulting from attempts by
foreign or domestic governments to assess taxes on 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 on CMS 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 of CMS Energy to
transfer funds to CMS Energy in the form of cash dividends, loans, or advances

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


•changes in financial or regulatory accounting principles or policies (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 in CMS 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 in
CMS 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 I-Item 1A. Risk
Factors in the 2022 Form 10K.
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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 (Unaudited)                                        42
  Consolidated Statements of Income (Unaudited)                                                   42
  Consolidated Statements of Comprehensive Income (Unaudited)                                     44
  Consolidated Statements of Cash Flows (Unaudited)                                               45
  Consolidated Balance Sheets (Unaudited)                                                         46
  Consolidated Statements of Changes in Equity (Unaudited)                                        48
  Consumers Consolidated Financial Statements                                                     49
  Consolidated Statements of Income (Unaudited)                                                   49
  Consolidated Statements of Comprehensive Income (Unaudited)                                     50
  Consolidated Statements of Cash Flows (Unaudited)                                               51
  Consolidated Balance Sheets (Unaudited)                                                         52
  Consolidated Statements of Changes in Equity (Unaudited)                                        54
  Notes to the Unaudited Consolidated Financial Statements                                        55

        1:     Regulatory Matters                                                                 55
        2:     Contingencies and Commitments                                                      56
        3:     Financings and Capitalization                                                      60
        4:     Fair Value Measurements                                                            62
        5:     Financial Instruments                                                              64

        6:     Retirement Benefits                                                                65
        7:     Income Taxes                                                                       66
        8:     Earnings Per Share-CMS Energy                                                      67
        9:     Revenue                                                                            68
       10:     Reportable Segments                                                                70
       11:     Variable Interest Entities                                                         72
       12:     Exit Activities                                                                    74


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CMS Energy Corporation
Consumers Energy Company
Management's Discussion and Analysis of Financial Condition and Results of
Operations

This MD&A is a combined report of CMS Energy and Consumers.

Executive Overview


CMS Energy is an energy company operating primarily in Michigan. It is the
parent holding company of several subsidiaries, including Consumers, an electric
and gas utility, and NorthStar Clean Energy, primarily a domestic independent
power producer and marketer. 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. NorthStar Clean
Energy, 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.

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 NorthStar Clean Energy, its nonutility operations and
investments. 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

The Triple Bottom Line

CMS Energy's and Consumers' purpose is to achieve world class performance while
delivering hometown service. In support of this purpose, CMS Energy and
Consumers 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 CMS Energy and Consumers create for
customers and investors, but also their responsibility to social and
environmental goals. The triple bottom line balances the interests of employees,
customers, suppliers, regulators, creditors, Michigan's residents,

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the investment community, and other stakeholders, and it reflects the broader
societal impacts of CMS Energy's and Consumers' activities.

                           [[Image Removed: cms.jpg]]

CMS Energy's Environmental, Social, Governance and Sustainability Report, which
is available to the public, describes CMS Energy's and Consumers' progress
toward world class performance measured in the areas of people, planet, and
profit.

People: The people element of the triple bottom line represents CMS Energy's and
Consumers' commitment to their employees, their customers, the residents of
local communities in which they do business, and other stakeholders.


The safety of employees, customers, and the general public is a priority of
CMS 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. Over the last ten years, Consumers'
Occupational Safety and Health Administration recordable incident rate has
decreased by 34 percent.

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, less-costly dispatchable generation sources, and energy waste
reduction and demand response programs
•targeted infrastructure investment to reduce maintenance costs and improve
reliability and safety
•supply chain optimization
•economic development to increase sales and reduce overall rates
•information and control system efficiencies
•employee and retiree health care cost sharing
•workforce productivity enhancements

While CMS Energy and Consumers have experienced some supply chain disruptions
and inflationary pressures, they have taken steps to mitigate the impact on
their ability to provide safe and reliable service to customers.


Planet: The planet element of the triple bottom line represents CMS Energy's and
Consumers' commitment to protect the environment. This commitment extends beyond
compliance with various state

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and federal environmental, health, and safety laws and regulations. Management
considers climate change and other environmental risks in 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 through 2022, CMS Energy and Consumers have:


•decreased their combined percentage of electric supply (self-generated and
purchased) from coal by 17 percentage points since 2015
•reduced carbon dioxide emissions by over 30 percent since 2005
•reduced the amount of water used to generate electricity by over 35 percent
since 2012
•reduced landfill waste disposal by over 1.7 million tons since 1992
•reduced methane emissions by more than 20 percent since 2012

Since 2005, Consumers has reduced its sulfur dioxide and particulate matter
emissions by over 90 percent and its NOx emissions by over 80 percent. Consumers
began tracking mercury emissions in 2007; since that time, it has reduced such
emissions by nearly 90 percent.

The 2016 Energy Law:


•raised the renewable portfolio standard to 15 percent in 2021; Consumers has
met the 15percent requirement and expects to continue meeting the requirement
going forward with a combination of newly generated RECs and previously
generated RECs carried over from prior years
•established a goal of 35percent combined renewable energy and energy waste
reduction by 2025; Consumers achieved 33percent combined renewable energy and
energy waste reduction through 2022
•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 electric capacity and energy
resources

Consumers' Clean Energy Plan details its strategy to meet customers' long-term
energy needs. The Clean Energy Plan was most recently revised and approved by
the MPSC in June 2022. 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.

The Clean Energy Plan outlines Consumers' 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 an existing natural gas-fueled generating unit, providing an
additional 1,176 MW of nameplate capacity and allowing Consumers to continue to
provide controllable sources of electricity to customers
•solicit approximately 700 MW of capacity through PPAs from sources able to
deliver to Michigan's Lower Peninsula beginning in 2025
•expand its investment in renewable energy, adding nearly 8,000 MW of solar
generation by 2040

Under the Clean Energy Plan, Consumers earns a return equal to its
weighted-average cost of capital on payments made under new competitively bid
PPAs with non-affiliated entities approved by the MPSC.

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The Clean Energy Plan will allow Consumers to exceed its breakthrough goal of at
least 50percent combined renewable energy and energy waste reduction by 2030.

Presented in the following illustration is Consumers' 2021 capacity portfolio
and its future capacity portfolio under its Clean Energy Plan. This illustration
includes the effects of purchased capacity and energy waste reduction and uses
the nameplate capacity for all energy sources:

                            [[Image Removed: 7801]]

1 Does not include RECs.


2  These amounts and fuel sources will vary and are dependent on a one-time
competitive solicitation to acquire approximately 700 MW of capacity through
PPAs from sources able to deliver to Michigan's Lower Peninsula beginning in
2025.

In addition to Consumers' plan to eliminate its use of coal-fueled generation in
2025, CMS Energy and Consumers have set the netzero emissions goals discussed
below.

Net-zero methane emissions from natural gas delivery system by 2030: Under its
Methane Reduction Plan, 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 likely be offset by
purchasing and/or producing renewable natural gas.

Net-zero carbon emissions from electric business by 2040: This goal includes not
only emissions from 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 Clean Energy Plan. New technologies and
carbon offset measures including, but not limited to, carbon sequestration,
methane emission capture, forest preservation, and reforestation may be used to
close the gap to achieving net-zero carbon emissions.

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Net-zero greenhouse gas emissions target for the entire business by 2050: This
goal, announced in March 2022, incorporates greenhouse gas emissions from
Consumers' natural gas delivery system, including suppliers and customers, and
has an interim goal of reducing customer emissions by 20 percent by 2030.
Consumers expects to meet this goal through carbon offset measures, renewable
natural gas, energy efficiency and demand response programs, and the adoption of
cost-effective emerging technologies once proven and commercially available.

Additionally, to advance its environmental stewardship in Michigan and to
minimize the impact of future regulations, Consumers set the following targets
in 2022:


•to enhance, restore, or protect 6,500 acres of land by 2026; in 2022, Consumers
enhanced, restored, or protected over 700 acres of land
•to reduce water usage by 1.5 billion gallons by 2026; in 2022, Consumers
reduced water usage by more than 750 million gallons
•to increase the rate of waste diverted from landfills (through waste reduction,
recycling, and reuse) to 90 percent from a baseline of 88 percent through 2023;
in 2022, Consumers' rate of waste diverted from landfills was 92 percent

CMS Energy and Consumers are monitoring numerous legislative, policy, and
regulatory initiatives, including those to regulate and report greenhouse gases,
and related litigation. While CMS Energy and Consumers cannot predict the
outcome of these matters, which could affect them materially, they intend to
continue to move forward with their clean and lean strategy.

Profit: The profit element of the triple bottom line represents CMS 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 attract and retain talent, and to
reinvest in the communities they serve.

For the three months ended March 31, 2023, CMS Energy's net income available to
common stockholders was $202 million, and diluted EPS were $0.69. This compares
with net income available to common stockholders of $351 million and diluted EPS
of $1.21 for the three months ended March 31, 2022. In 2023, lower gas and
electric sales due primarily to unfavorable weather, and higher service
restoration costs, were partially offset by gas and electric rate increases. A
more detailed discussion of the factors affecting CMS 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 relatively stable compared to 2022. 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 Line


CMS 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 2022, CMS Energy and Consumers:

•settled and received approval of Consumers' Clean Energy Plan, gas rate case,
and electric rate case, demonstrating the constructive nature of Michigan's
regulatory environment
•partnered with state and federal agencies to secure over $100 million of
customer assistance to help keep customer bills affordable
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•committed to power over 1,200 Michigan public buildings with 100percent clean
energy
•reached an agreement with General Motors Company, a non-affiliated company, to
power all of its auto plants within Consumers' electric service territory with
100percent clean energy
•announced the "Clean Air" program for residential and business customers who
want to offset carbon emissions from their natural gas use and help protect the
planet's atmosphere
•installed five new units at the Freedom Compressor Station, continuing progress
toward achieving Consumers' Natural Gas Delivery Plan, making its gas system
even more safe, reliable, affordable, and clean
•participated in the state's economic development efforts that resulted in
Gotion, Inc., a nonaffiliated global battery components producer, committing to
construct a manufacturing facility in Big Rapids, Michigan
•received recognition by Forbes® as the #1 utility company in the U.S. for
America's Best Employers for Women, as well as a top company for America's Best
Employers for Diversity

CMS Energy and Consumers will continue to utilize the CE 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: Over the next five years, Consumers expects to make significant
expenditures on infrastructure upgrades, replacements, and clean generation.
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 over
seven percent. This rate-base growth, together with cost-control measures,
should allow Consumers to maintain affordable customer prices.

Presented in the following illustration are planned capital expenditures of
$15.5 billion that Consumers expects to make from 2023 through 2027:

                            [[Image Removed: 14200]]
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Of this amount, Consumers plans to spend $12.4 billion over the next five years
to primarily maintain and upgrade its gas infrastructure and electric
distribution systems in order to enhance safety and reliability, improve
customer satisfaction, reduce energy waste on those systems, and facilitate its
clean energy transformation. The gas infrastructure projects comprise
$6.3 billion to sustain deliverability, enhance pipeline integrity and safety,
and reduce methane emissions. Electric distribution and other projects comprise
$6.1 billion to strengthen circuits and substations, replace poles, and
interconnect clean energy resources. Consumers also expects to spend
$3.1 billion on clean generation, which includes investments in wind, solar, and
hydroelectric generation resources.

Regulation: Regulatory matters are a key aspect of Consumers' business,
particularly rate cases and regulatory proceedings before the MPSC, which permit
recovery of new investments while helping to ensure that customer rates are fair
and affordable. Important regulatory events and developments not already
discussed are summarized below.

2022 Gas Rate Case: In December 2022, Consumers filed an application with the
MPSC seeking an annual rate increase of $212 million, based on a 10.25percent
authorized return on equity for the projected twelve-month period ending
September 30, 2024. The filing requests authority to recover new infrastructure
investment and related costs that are expected to allow Consumers to improve
system safety and reliability and reduce fugitive methane emissions.

2022 Electric Rate Case: In January 2023, the MPSC approved a settlement
agreement authorizing an annual rate increase of $155 million, based on a
9.9-percent authorized return on equity. The MPSC also approved a surcharge for
the recovery of $6 million of depreciation, property tax, and interest expense
related to distribution investments made in 2021 that exceeded what was
authorized in rates in accordance with the December 2020 electric rate order.
The new rates became effective January 20, 2023.

Looking Forward


CMS 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 realizing
CMS Energy's and Consumers' purpose of achieving world class performance while
delivering hometown service.

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Results of Operations

CMS Energy Consolidated Results of Operations

In

Millions, Except Per Share Amounts


Three Months Ended March 31                                                                       2023        2022          Change
Net Income Available to Common Stockholders                                                                        $  202          $  351          $

(149)

Basic Earnings Per Average Common Share                                                                            $ 0.69          $ 1.21          $

(0.52)

Diluted Earnings Per Average Common Share                                                                          $ 0.69          $ 1.21          $ (0.52)


                                                                 In Millions

Three Months Ended March 31                                             2023      2022      Change
Electric utility                                                                       $   70      $ 167      $  (97)
Gas utility                                                                               154        216         (62)
NorthStar Clean Energy                                                                      7          8          (1)
Corporate interest and other                                                              (29)       (40)         11

Net Income Available to Common Stockholders                                            $  202      $ 351      $ (149)

Amounts in the following tables are presented pre-tax, with the exception of
income tax changes.

Presented in the following table is a summary of changes to net income available
to common stockholders for the three months ended March 31, 2023 versus 2022:


                                                                               In Millions

Three Months Ended March 31, 2022                                                                                $  351
Reasons for the change
Consumers electric utility and gas utility
Electric sales                                                                                   $  (54)
Gas sales                                                                                           (76)
Electric rate increase                                                                               18
Gas rate increase                                                                                    69

Higher service restoration costs due primarily to 2023 ice
storms

                                                                                              (67)
Higher interest charges                                                                             (23)
Higher other maintenance and operating expenses                                                     (13)
Higher property taxes, reflecting higher capital spending                                           (10)
Higher depreciation and amortization                                                                 (8)
Other                                                                                                 5
                                                                                                                 $ (159)
NorthStar Clean Energy                                                                                               (1)
Corporate interest and other                                                                                         11

Three Months Ended March 31, 2023                                                                                $  202


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Consumers Electric Utility Results of Operations

Presented in the following table are the detailed changes to the electric
utility's net income available to common stockholders for the three months ended
March 31, 2023 versus 2022:

In Millions


Three Months Ended March 31, 2022                                                                                $  167
Reasons for the change
Electric deliveries1 and rate increases
Rate increase, including return on higher renewable capital
spending                                                                                         $   18
Higher energy waste reduction program revenues                                                       12
Lower revenue due primarily to unfavorable weather and sales mix                                    (47)
Lower other revenues                                                                                 (7)
                                                                                                                 $  (24)
Maintenance and other operating expenses
Lower distribution, transmission, and generation expenses                                             6

Higher service restoration costs due primarily to 2023 ice
storms

                                                                                              (67)
Higher energy waste reduction program costs                                                         (12)
Lower mutual insurance distribution                                                                  (9)

Higher other maintenance and operating expenses                                                      (8)
                                                                                                                    (90)

General taxes
Higher property taxes, reflecting higher capital spending, and
other

                                                                                                                (5)

Other income, net of expenses                                                                                         5

Interest charges                                                                                                    (12)
Income taxes
Lower electric utility pre-tax earnings                                                              33
Deferred tax liability reversal2                                                                      9
Lower production tax credits                                                                         (8)
Higher other income taxes                                                                            (5)
                                                                                                                     29
Three Months Ended March 31, 2023                                                                                $   70


1Deliveries to end-use customers were 8.8 billion kWh in 2023 and
9.2 billion kWh in 2022.

2See Note 7, Income Taxes.

                                       22

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Consumers Gas Utility Results of Operations

Presented in the following table are the detailed changes to the gas utility's
net income available to common stockholders for the three months ended
March 31, 2023 versus 2022:

In Millions


Three Months Ended March 31, 2022                                                                    $ 216
Reasons for the change
Gas deliveries1 and rate increases
Rate increase                                                                              $ 69
Higher energy waste reduction program revenues                                                4
Lower revenue due primarily to unfavorable weather                                          (78)
Lower other revenues                                                                          2
                                                                                                     $  (3)
Maintenance and other operating expenses
Lower distribution, transmission, and compression expenses                                    3
Higher energy waste reduction program costs                                                  (4)
Higher other maintenance and operating expenses                                              (5)
                                                                                                        (6)
Depreciation and amortization
Increased plant in service, reflecting higher capital spending                                          (8)
General taxes
Higher property taxes, reflecting higher capital spending                                               (5)

Interest charges                                                                                       (11)
Income taxes
Lower gas utility pre-tax earnings and other                                                  8
Deferred tax liability reversal2                                                              4
Absence of 2022 accelerated tax amortizations2                                              (41)

                                                                                                       (29)
Three Months Ended March 31, 2023                                                                    $ 154

1Deliveries to end-use customers were 119 bcf in 2023 and 140 bcf in 2022.

2See Note 7, Income Taxes.

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NorthStar Clean Energy Results of Operations


Presented in the following table are the detailed changes to NorthStar Clean
Energy's net income available to common stockholders for the three months ended
March 31, 2023 versus 2022:

                                                     In Millions

Three Months Ended March 31, 2022                                         $ 8
Reason for the change
Higher earnings from renewable projects                                   $ 3
Lower production tax credits

(4)

Three Months Ended March 31, 2023                                         $ 7

Corporate Interest and Other Results of Operations

Presented in the following table are the detailed changes to corporate interest
and other results for the three months ended March 31, 2023 versus 2022:

In

Millions


Three Months Ended March 31, 2022                                                        $ (40)
Reasons for the change
Lower income tax expense due to lower pre-tax earnings                                   $  13
Higher interest earnings                                                                     2
Absence of discontinued operations from 2022                                                (4)

Three Months Ended March 31, 2023                                                        $ (29)


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Cash Position, Investing, and Financing


At March 31, 2023, CMS Energy had $598 million of consolidated cash and cash
equivalents, which included $27 million of restricted cash and cash equivalents.
At March 31, 2023, Consumers had $343 million of consolidated cash and cash
equivalents, which included $26 million of restricted cash and cash equivalents.

Operating Activities

Presented in the following table are specific components of net cash provided by
operating activities for the three months ended March 31, 2023 versus 2022:


                                                                                          In Millions
CMS Energy, including Consumers
Three Months Ended March 31, 2022                                                          $   707
Reasons for the change
Lower net income                                                                           $  (151)
Noncash transactions1                                                                          12

Favorable impact of changes in core working capital,2 due primarily to higher
collections and higher prices on gas sold to customers in 2023

Favorable impact of changes in other assets and liabilities, due primarily to
recovery of 2022 power supply costs underrecovery3

                                              23
Three Months Ended March 31, 2023                                                          $ 1,040

Consumers

Three Months Ended March 31, 2022                                                          $   745
Reasons for the change
Lower net income                                                                           $  (151)
Noncash transactions1                                                                           2

Favorable impact of changes in core working capital,2 due primarily to higher
collections and higher prices on gas sold to customers in 2023

Favorable impact of changes in other assets and liabilities, due primarily to
recovery of 2022 power supply costs underrecovery3

                                              32
Three Months Ended March 31, 2023                                                          $ 1,070

1Noncash transactions comprise depreciation and amortization, changes in
deferred income taxes and investment tax credits, and other noncash operating
activities and reconciling adjustments.

2Core working capital comprises accounts receivable, accrued revenue,
inventories, accounts payable, and accrued rate refunds.

3For information regarding the underrecovery of power supply costs, see Note 1,
Regulatory Matters.

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Investing Activities

Presented in the following table are specific components of net cash used in
investing activities for the three months ended March 31, 2023 versus 2022:

In

Millions

CMS Energy, including Consumers
Three Months Ended March 31, 2022                                          $ (539)
Reasons for the change
Higher capital expenditures                                                $  (97)

Other investing activities, primarily higher costs to retire property

(15)

Three Months Ended March 31, 2023                                          $ (651)
Consumers
Three Months Ended March 31, 2022                                          $ (529)
Reasons for the change
Higher capital expenditures                                                $  (49)

Other investing activities, primarily higher costs to retire property

(10)

Three Months Ended March 31, 2023                                          $ (588)


Financing Activities

Presented in the following table are specific components of net cash provided by
(used in) financing activities for the three months ended March 31, 2023 versus
2022:

                                                                                          In Millions
CMS Energy, including Consumers
Three Months Ended March 31, 2022                                                          $  (170)
Reasons for the change
Higher debt issuances                                                                      $ 1,205
Higher debt retirements                                                                       (997)

Higher repayments of notes payable                                                             (20)

Higher payments of dividends on common and preferred stock                                      (9)

Higher contributions from noncontrolling interest                                                4

Other financing activities, primarily the absence of a payment of a long-term
contract liability, offset partially by higher debt issuance costs

                              14
Three Months Ended March 31, 2023                                                          $    27

Consumers

Three Months Ended March 31, 2022                                                          $  (222)
Reasons for the change
Higher debt issuances                                                                      $ 1,120
Higher debt retirements                                                                     (1,000)
Higher repayments of notes payable                                                             (20)
Lower repayments of borrowings from CMS Energy                                                 317
Lower stockholder contribution from CMS Energy                                                (375)
Higher payments of dividends on common stock                                                   (12)

Other financing activities, primarily higher debt issuance costs                                (7)
Three Months Ended March 31, 2023                                                          $  (199)


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Capital Resources and Liquidity

CMS Energy and Consumers expect to have sufficient liquidity to fund their
present and future commitments. CMS Energy uses dividends and tax-sharing
payments from its subsidiaries and external financing and capital transactions
to invest in its utility and nonutility businesses, retire debt, pay dividends,
and fund its other obligations. The ability of CMS Energy's subsidiaries,
including Consumers, to pay dividends to CMS Energy depends upon each
subsidiary's revenues, earnings, cash needs, and other factors. In addition,
Consumers' ability to pay dividends is restricted by certain terms included in
its articles of incorporation and potentially by FERC requirements and
provisions under the Federal Power Act of 1920 and the Natural Gas Act of 1938.
For additional details on Consumers' dividend restrictions, see Notes to the
Unaudited Consolidated Financial Statements-Note 3, Financings and
Capitalization-Dividend Restrictions. During the three months ended
March 31, 2023, Consumers paid $287 million in dividends on its common stock to
CMS Energy.

Consumers uses cash flows generated from operations and external financing
transactions, as well as stockholder contributions from CMS Energy, to fund
capital expenditures, retire debt, pay dividends, and fund its other
obligations. Consumers also uses these sources of funding to contribute to its
employee benefit plans.


Financing and Capital Resources: CMS Energy and Consumers rely on the capital
markets to fund their robust capital plan. Barring any sustained market
dislocations or disruptions, CMS Energy and Consumers expect to continue to have
ready access to the financial and capital markets and will continue to explore
possibilities to take advantage of market opportunities as they arise with
respect to future funding needs. If access to these markets were to diminish or
otherwise become restricted, CMS Energy and Consumers would implement
contingency plans to address debt maturities, which could include reduced
capital spending.

In January 2023, Consumers entered into a bond purchase agreement to issue an
aggregate principal amount of $400 million of first mortgage bonds through a
private placement offering. The bonds, which were priced in November 2022, carry
a weighted average interest rate of 5.251 percent and mature at varying dates
between 2026 and 2037. The bonds are expected to be issued in May 2023. The
proceeds of the bonds will be used to finance a portion of the purchase price of
the New Covert Generating Facility and for general corporate purposes. For more
information on the purchase of the New Covert Generating Facility, see Consumers
Electric Utility Outlook and Uncertainties-Clean Energy Plan.

CMS Energy has entered into forward sales transactions that it may either settle
physically by issuing shares of its common stock at the then-applicable forward
sale price specified by the agreement or settle net by delivering or receiving
cash or shares. CMS Energy may settle the contracts at any time through their
maturity dates, and presently intends to physically settle the contracts by
delivering shares of its common stock. As of March 31, 2023, these contracts
have an aggregate sales price of $440 million, maturing through February 2024.
For more information on these forward sale contracts, see Notes to the Unaudited
Consolidated Financial Statements-Note 3, Financings and Capitalization-Issuance
of Common Stock.

At March 31, 2023, CMS Energy had $529 million of its revolving credit facility
available and Consumers had $1.3 billion available under its revolving credit
facilities. CMS Energy and Consumers use these credit facilities for general
working capital purposes and to issue letters of credit. An additional source of
liquidity is Consumers' commercial paper program, which allows Consumers to
issue, in one or more placements, up to $500 million in aggregate principal
amount of commercial paper notes with maturities of up to 365 days at market
interest rates. These issuances are supported by Consumers' revolving credit
facilities. While the amount of outstanding commercial paper does not reduce the
available capacity of the revolving credit facilities, Consumers does not intend
to issue commercial paper

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in an amount exceeding the available capacity of the facilities. At
March 31, 2023, there were no commercial paper notes outstanding under this
program. For additional details on CMS Energy's and Consumers' secured revolving
credit facilities and commercial paper program, see Notes to the Unaudited
Consolidated Financial Statements-Note 3, Financings and Capitalization.

Certain of CMS Energy's and Consumers' credit agreements contain covenants that
require CMS Energy and Consumers to maintain certain financial ratios, as
defined therein. At March 31, 2023, no default had occurred with respect to any
financial covenants contained in CMS Energy's and Consumers' credit agreements.
CMS Energy and Consumers were each in compliance with these covenants as of
March 31, 2023, as presented in the following table:

                                      Limit        Actual
CMS Energy, parent only
Debt to Capital1               < 0.70 to 1.0   0.58 to 1.0
Consumers
Debt to Capital2               < 0.65 to 1.0   0.50 to 1.0

1Applies to CMS Energy's revolving credit agreement and letter of credit
reimbursement agreement, and a term loan agreement of a subsidiary of NorthStar
Clean Energy.

2Applies to Consumers' revolving credit agreements.

Outlook


Several business trends and uncertainties may affect CMS Energy's and Consumers'
financial condition and results of operations. These trends and uncertainties
could have a material impact on CMS Energy's and Consumers' consolidated income,
cash flows, or financial position. For additional details regarding these and
other uncertainties, see Forward-Looking Statements and Information; Notes to
the Unaudited Consolidated Financial Statements-Note 1, Regulatory Matters and
Note 2, Contingencies and Commitments; and Part II-Item 1A. Risk Factors.

Consumers Electric Utility Outlook and Uncertainties


Clean Energy Plan: Consumers' Clean Energy Plan details its strategy to meet
customers' long-term energy needs and provides the foundation for its goal to
achieve net-zero carbon emissions from its electric business by 2040. Under this
net-zero goal, Consumers plans to eliminate the impact of carbon emissions
created by the electricity it generates or purchases for customers.
Additionally, through its Clean Energy Plan, Consumers continues to make
progress on expanding its customer programs, namely its demand response, energy
efficiency, and conservation voltage reduction programs, as well as increasing
its renewable energy and pumped storage generation.

The Clean Energy Plan was most recently revised and approved by the MPSC in
June 2022. Under this plan, Consumers will eliminate the use of coal-fueled
generation in 2025 and expects to meet 90 percent of its customers' needs with
clean energy sources by 2040. Specifically, the Clean Energy Plan provides for:


•the retirement of the D.E. Karn coal-fueled generating units, totaling 515 MW
of nameplate capacity, in May 2023
•the retirement of the J.H. Campbell coal-fueled generating units, totaling
1,407 MW of nameplate capacity, in 2025
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•the retirement of the D.E. Karn oil and gas-fueled generating units, totaling
1,219 MW of nameplate capacity, in 2031, the units' original retirement date

The MPSC has authorized Consumers to issue securitization bonds to finance the
recovery of and return on the D.E. Karn coal-fueled generating units.
Additionally, the MPSC has authorized regulatory asset treatment for Consumers
to recover the remaining book value of the J.H. Campbell coal-fueled generating
units, as well as a 9.0percent return on equity, commencing in 2025.

Under the Clean Energy Plan, Consumers will:


•purchase the New Covert Generating Facility, a natural gas-fueled generating
unit with 1,176 MW of nameplate capacity in Van Buren County, Michigan, for
$815 million, subject to certain adjustments, in 2023; the purchase was approved
by FERC in November 2022
•conduct a one-time competitive solicitation to acquire approximately 700 MW of
capacity through PPAs from sources able to deliver to Michigan's Lower Peninsula
beginning in 2025; of this amount, 500 MW would be from dispatchable sources

These actions are expected to help Consumers continue to provide controllable
sources of electricity to customers while expanding its investment in renewable
energy. The Clean Energy Plan forecasts renewable energy capacity levels of
30 percent in 2025, 43 percent in 2030, and 61 percent in 2040, including the
addition of nearly 8,000 MW of solar generation. Additionally, Consumers plans
to deploy battery storage beginning in 2024, with 75 MW of energy storage by
2027 and an additional 475 MW by 2040.

Under its Clean Energy Plan, Consumers bids new capacity competitively and will
own and operate approximately 50 percent of new capacity, with the remainder
being built and owned by third parties. Additionally, Consumers earns a return
equal to its weighted-average cost of capital on payments made under new
competitively bid PPAs with non-affiliated entities approved by the MPSC.

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As a result of requests for proposals, Consumers has entered into PPAs to
purchase renewable capacity, energy, and RECs from solar generating facilities
and build transfer agreements to purchase solar generating facilities. Presented
in the following illustration is the aggregate renewable capacity that Consumers
expects to add to its portfolio as a result of these agreements:

                            [[Image Removed: 3902]]
In support of its Clean Energy Plan, Consumers issued a request for proposals in
September 2022 to acquire approximately 700 MW of capacity through PPAs from
sources able to deliver to Michigan's Lower Peninsula beginning in 2025.
Specifically, Consumers solicited offers to acquire 500 MW of capacity from
dispatchable sources and 200 MW of capacity from intermittent resources and
dispatchable, non-intermittent clean capacity resources (including battery
storage resources).

In March 2022, the U.S. Department of Commerce announced it is opening inquiries
into whether manufacturers of solar modules that are produced in certain
countries using supplies obtained from China are circumventing antidumping and
countervailing duties which apply to Chinese modules. The U.S. Department of
Commerce has made an initial determination that four manufacturers have
circumvented tariffs. The remainder of this inquiry process is continuing, with
a final ruling expected in May 2023. In June 2022, the Biden Administration
paused for two years the imposition of duties that might result from the
U.S. Department of Commerce's pending inquiries. In addition, the Uyghur Forced
Labor Prevention Act, which was enacted in 2021 and became effective in
June 2022, along with an earlier withhold release order that U.S. Customs and
Border Protection issued in 2021, restrict the importation of goods sourced from
the Xinjiang region of China. Solar modules whose raw materials come from the
Xinjiang region are a key focus of these import laws. Consumers continues to
closely monitor these matters and their potential impacts on availability of
solar modules and timing associated with pending and planned solar projects.

Renewable Energy Plan: Michigan has established a 15-percent renewable portfolio
standard. Under this standard, Consumers is required to submit RECs, which
represent proof that the associated electricity was generated from a renewable
energy resource, in an amount equal to at least 15 percent of Consumers'
electric sales volume each year. Under its renewable energy plan, Consumers has
met the 15percent

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requirement and expects to continue meeting the requirement going forward with a
combination of newly generated RECs and previously generated RECs carried over
from prior years.

Under Consumers' renewable energy plan, the MPSC has approved the acquisition of
up to 525 MW of new wind generation projects and authorized Consumers to earn a
10.7percent return on equity on any projects approved by the MPSC.
Specifically, the MPSC has approved the following:

•purchase and construction of a 150MW wind generation project in Gratiot
County, Michigan; the project became operational and Consumers took full
ownership in 2020
•purchase of a 166MW wind generation project in Hillsdale, Michigan; the
project became operational and Consumers took full ownership in 2021
•purchase of a wind generation project under development, with capacity of up to
201 MW, in Gratiot County, Michigan; Consumers expects to take full ownership
and begin commercial operation of the project in the fourth quarter of 2023

The MPSC also approved the execution of a 20-year PPA under which Consumers will
purchase 100 MW of renewable capacity, energy, and RECs from a 149MW solar
generating facility to be constructed in Calhoun County, Michigan; the facility
is targeted to be operational in 2024.

Voluntary Large Customer Renewable Energy Program: Consumers provides service
under a program that provides large full-service electric customers with the
opportunity to advance the development of renewable energy beyond the
requirements of the 2016 Energy Law. In 2021, the MPSC approved Consumers'
request to amend its renewable energy plan to remove the annual subscription
limit associated with this program. The MPSC also approved up to 1,000 MW of new
wind and solar generation projects between 2024 and 2027 to meet customer demand
for the program. Consumers will competitively solicit for additional renewable
energy assets based on customer applications and will construct the assets based
on customer subscriptions to the program. In March 2023, Consumers entered into
a build transfer agreement for a 309MW solar generating facility to be
constructed in Calhoun County, Michigan; the facility is targeted to be
operational in 2025. The build transfer agreement is subject to MPSC approval.

Electric Customer Deliveries and Revenue: Consumers' electric customer
deliveries are seasonal and largely dependent on Michigan's economy. The
consumption of electric energy typically increases in the summer months, due
primarily to the use of air conditioners and other cooling equipment. In
addition, Consumers' electric rates, which follow a seasonal rate design, are
higher in the summer months than in the remaining months of the year. Each year
in June, electric residential customers transition to a summer peak time-of-use
rate that allows them to take advantage of lower-cost energy during off-peak
times during the summer months. Thus, customers can reduce their electric bills
by shifting their consumption from onpeak to offpeak times.

Over the next five years, Consumers expects weather-normalized electric
deliveries to remain relatively stable compared to 2022. This outlook reflects
the effects of energy waste reduction programs offset largely by modest growth
in electric demand. Actual delivery levels will depend on:

•energy conservation measures and results of energy waste reduction programs
•weather fluctuations
•Michigan's economic conditions, including utilization, expansion, or
contraction of manufacturing facilities, population trends, electric vehicle
adoption, and housing activity

Electric ROA: 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 percent of Consumers' sales, with certain
exceptions. At March 31, 2023, electric deliveries under the ROA program

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were at the tenpercent limit. Of Consumers' 1.9 million electric customers,
fewer than 300, or 0.02 percent, purchased electric generation service under the
ROA program.

The 2016 Energy Law established a path to ensure that forward capacity is
secured for all electric customers in Michigan, including customers served by
alternative electric suppliers under ROA. The law also authorized the MPSC to
ensure that alternative electric suppliers have procured enough capacity to
cover their anticipated capacity requirements for the four-year forward period.
In 2017, the MPSC issued an order establishing a state reliability mechanism for
Consumers. Under this mechanism, if an alternative electric supplier does not
demonstrate that it has procured its capacity requirements for the four-year
forward period, its customers will pay a set charge to the utility for capacity
that is not provided by the alternative electric supplier.

During 2017, the MPSC issued orders finding that it has statutory authority to
determine and implement a local clearing requirement, which requires all
electric suppliers to demonstrate that a portion of the capacity used to serve
customers is located in the MISO footprint in Michigan's Lower Peninsula. In
2020, the Michigan Supreme Court affirmed the MPSC's statutory authority to
implement a local clearing requirement on individual electric providers.

In 2020, ABATE and another intervenor filed a complaint against the MPSC in the
U.S. District Court for the Eastern District of Michigan challenging the
constitutionality of a local clearing requirement. The complaint requests the
federal court to issue a permanent injunction prohibiting the MPSC from
implementing a local clearing requirement on individual electric providers. In
February 2023, the U.S. District Court for the Eastern District of Michigan
dismissed the complaint. In March 2023, ABATE and the other intervenor filed a
claim of appeal of the Eastern District Court's decision with the U.S. Court of
Appeals for the Sixth Circuit. In April 2023, Consumers and the MPSC filed
appearances and also filed cross-appeals.

Electric Rate Matters: Rate matters are critical to Consumers' electric utility
business. For additional details on rate matters, see Notes to the Unaudited
Consolidated Financial Statements-Note 1, Regulatory Matters and Note 2,
Contingencies and Commitments.

MPSC Distribution System Audit: In October 2022, the MPSC ordered the state's
two largest electric utilities, including Consumers, to report on their
compliance with regulations and past MPSC orders governing the utilities'
response to outages and downed lines. Also, the MPSC Staff was directed to
engage a third-party auditor to review all equipment and operations of the two
utilities' distribution systems.

Consumers has responded to the MPSC's order and awaits further action by the
MPSC. Consumers is committed to working with other state utilities, the
third-party auditor, and the MPSC to continue improving electric reliability and
safety in Michigan. In March 2023, the MPSC Staff issued a request for proposal
to engage a third-party auditor and is expected to execute a contract by
September 2023.

Retention Incentive Program: Under its Clean Energy Plan, Consumers will retire
the D.E. Karn coal-fueled electric generating units in May 2023 and the
J.H. Campbell coal-fueled generating units in 2025. Consumers has announced
retention incentive programs to ensure necessary staffing at both locations
through the anticipated retirements. The aggregate cost of the D.E. Karn program
through 2022 was $31 million, and Consumers expects to recognize an additional
$2 million of retention benefit costs in the first half of 2023. The aggregate
cost of the J.H. Campbell program through 2025 is estimated to be $50 million;
Consumers expects to recognize $16 million of retention benefit costs in 2023.
The MPSC has approved deferred accounting treatment for these costs; this
expense will be deferred as a regulatory asset. For additional details on these
programs, see Notes to the Unaudited Consolidated Financial Statements-Note 12,
Exit Activities.

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Electric Environmental Outlook: Consumers' electric operations are subject to
various federal, state, and local environmental laws and regulations. Consumers
estimates that it will incur capital expenditures of $210 million from 2023
through 2027 to continue to comply with RCRA, the Clean Air Act, and numerous
other environmental regulations. Consumers expects to recover these costs in
customer rates, but cannot guarantee this result. Multiple environmental laws
and regulations are subject to litigation. Consumers' primary environmental
compliance focus includes, but is not limited to, the following matters.

Air Quality: Multiple air quality regulations apply, or may apply, to Consumers'
electric utility.


In 2012, the EPA published emission standards for electric generating units,
known as MATS, based on Section 112 of the Clean Air Act. Consumers has
complied, and continues to comply, with the MATS regulation, and does not expect
MATS to materially impact its environmental strategy.

CSAPR requires Michigan and many other states to improve air quality by reducing
power plant emissions that, according to EPA modeling, contribute to
ground-level ozone in other downwind states. Since its 2015 effective date,
CSAPR has been revised several times. In March 2023, the EPA finalized a
revision to CSAPR affecting Michigan. This regulation establishes allowance
budgets for electric generating units in 22 states, including Michigan, between
2023 and 2029 and changes the mechanism for allocating such allowances on a
year-over-year basis beginning in 2026. Consumers is evaluating potential cost
impacts from this regulation on its electric generating units.

In 2015, the EPA lowered the NAAQS for ozone and made it more difficult to
construct or modify power plants and other emission sources in areas of the
country that do not meet the ozone standard. In 2018, the EPA designated certain
areas of Michigan as not meeting the ozone standard. None of Consumers'
fossil-fuel-fired generating units are located in these areas. Additionally, in
January 2023, the EPA proposed lowering the NAAQS for particulate matter.
Consumers will continue to monitor NAAQS rulemakings and evaluate potential
impacts to its generating assets.

Consumers' strategy to comply with air quality statutes and regulations involved
the installation and operation of emission control equipment at some facilities
and the suspension of operations at others; however, Consumers continues to
evaluate these rules in conjunction with other EPA and EGLE rulemakings,
litigation, executive orders, treaties, and congressional actions. This
evaluation could result in:

•a change in Consumers' fuel mix
•changes in the types of generating units Consumers may purchase or build in the
future
•changes in how certain units are operated
•the retirement, mothballing, or repowering with an alternative fuel of some of
Consumers' generating units
•changes in Consumers' environmental compliance costs
•the purchase or sale of allowances

Greenhouse Gases: There have been numerous legislative and regulatory
initiatives at the state, regional, national, and international levels that
involve the potential regulation and reporting of greenhouse gases. Consumers
continues to monitor and comment on these initiatives, as appropriate.


In June 2022, the EPA announced its plan to propose a new rule to address
greenhouse gas emissions from existing fossil-fuel-fired electric generating
units. Under its Clean Energy Plan, Consumers will eliminate the use of
coal-fueled generation in 2025. Therefore, it is unlikely that the proposed rule
will materially impact Consumers over the remaining operating lives of these
coal-fueled facilities. However,

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Consumers cannot predict the form and extent of such potential regulation on its
natural gas-fueled generation until this rule is released.

Under the Paris Agreement, an international agreement addressing greenhouse gas
emissions, the U.S. has committed to reduce greenhouse gas emissions by 50 to
52 percent from 2005 levels by 2030. Under its Clean Energy Plan, Consumers
plans to reduce carbon emissions from its electric business by 60 percent from
2005 levels in 2025. At this time, Consumers does not expect any adverse changes
to its environmental strategy as a result of this event, as its plans exceed the
nationally committed reduction. The commitment made by the U.S. is not binding
without new Congressional legislation.

In 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 28percent reduction below 2005 levels of greenhouse
gas emissions by 2025. These goals are aspirational in nature and any changes in
law or regulation to achieve these goals would need to be approved by the
Michigan Legislature or the relevant regulatory agency. Additionally, Consumers
has already surpassed the 28percent reduction milestone for its owned electric
generation and previously announced a goal of achieving net-zero carbon
emissions from its electric business by 2040. Consumers does not expect any
adverse changes to its environmental strategy as a result of this event.

Increased frequency or intensity of severe or extreme weather events, including
those due to climate change, could materially impact Consumers' facilities,
energy sales, and results of operations. Consumers is unable to predict these
events or their financial impact; however, Consumers evaluates the potential
physical impacts of climate change on its operations, including increased
frequency or intensity of storm activity; increased precipitation; increased
temperature; and changes in lake and river levels. Consumers released a report
addressing the physical risks of climate change on its infrastructure in 2022.
Consumers is taking steps to mitigate these risks as appropriate.

While Consumers cannot predict the outcome of changes in U.S. policy or of other
legislative, executive, or regulatory initiatives involving the potential
regulation or reporting of greenhouse gases, it intends to move forward with its
Clean Energy Plan, its present net-zero goals, and its emphasis on reliable and
resilient supply. Litigation, international treaties, executive orders, federal
laws and regulations (including regulations by the EPA), and state laws and
regulations, if enacted or ratified, could ultimately impact Consumers.
Consumers may be required to:

•replace equipment
•install additional emission control equipment
•purchase emission allowances or credits (including potential greenhouse gas
offset credits)
•curtail operations
•arrange for alternative sources of supply
•purchase facilities that generate fewer emissions
•mothball or retire facilities that generate certain emissions
•pursue energy efficiency or demand response measures more swiftly
•take other steps to manage or lower the emission of greenhouse gases

Although associated capital or operating costs relating to greenhouse gas
regulation or legislation could be material and cost recovery cannot be assured,
Consumers expects to recover these costs in rates consistent with the recovery
of other reasonable costs of complying with environmental laws and regulations.

CCRs: In 2015, the EPA published a rule regulating CCRs under RCRA. This rule
adopts minimum standards for beneficially using and disposing of nonhazardous
CCRs and establishes technical

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requirements for CCR landfills and surface impoundments. The rule also sets out
conditions under which some CCR units would be forced to cease receiving CCR
wastewater and initiate closure. Due to continued litigation, many aspects of
the rule have been remanded to the EPA, resulting in more proposed and final
rules.

Separately, Congress passed legislation in 2016 allowing participating states to
develop permitting programs for CCRs under RCRA Subtitle D. In 2020, EGLE
submitted a regulatory package for Michigan's permit program to the EPA for its
review, which is still pending.

Consumers, with agreement from EGLE, completed the work necessary to initiate
closure by excavating CCRs or placing a final cover over each of its relevant
CCR units prior to the closure initiation deadline. Consumers has historically
been authorized to recover in electric rates costs related to coal ash disposal
sites.

Water: Multiple water-related regulations apply, or may apply, to Consumers.


The EPA regulates cooling water intake systems of existing electric generating
plants under Section 316(b) of the Clean Water Act. The rules seek to reduce
alleged harmful impacts on aquatic organisms, such as fish. In 2018, Consumers
submitted to EGLE for approval all required studies and recommended plans to
comply with Section 316(b) for its coal-fueled units, but has not yet received
final approval.

The EPA also regulates the discharge of wastewater through its effluent
limitation guidelines for steam electric generating plants. In 2020, the EPA
revised previous guidelines related to the discharge of certain wastewater, but
allowed for extension of the compliance deadline from the end of 2023 to the end
of 2025, upon approval by EGLE through the NPDES permitting process. Consumers
received such an extension to 2025 for its J.H. Campbell generating facility,
which it plans to retire in 2025. In March 2023, the EPA released a proposed
rule seeking to replace its 2020 rule and corresponding effluent limitation
guidelines. Consumers is evaluating the proposed effluent limitation guidelines
for its potential impacts on its generating facilities.

In recent years, the EPA and the U.S. Army Corps of Engineers have proposed
changes to the scope of federal jurisdiction over bodies of water and to the
frequency of dual jurisdiction in states with authority to regulate the same
waters; Michigan is one such state. Additionally, a final 2022 rulemaking
changed the definition of "Waters of the United States." Consumers does not
expect adverse changes to its environmental strategy as a result of the current
interpretations.

Many of Consumers' facilities maintain NPDES permits, which are vital to the
facilities' operations. Consumers applies for renewal of these permits every
five years. Failure of EGLE to renew any NPDES permit, a successful appeal
against a permit, a change in the interpretation or scope of NPDES permitting,
or onerous terms contained in a permit could have a significant detrimental
effect on the operations of a facility.

Protected Wildlife: Multiple regulations apply, or may apply, to Consumers
relating to protected species and habitats.


Statutes like the federal Endangered Species Act, the Migratory Bird Treaty Act,
and the Bald and Golden Eagle Protection Act may impact operations at Consumers'
facilities. In 2021, the U.S. Fish and Wildlife Service announced its intent to
regulate incidental take under the Migratory Bird Treaty Act. Any resulting
permitting and monitoring fees and/or restrictions on operations could impact
Consumers' existing and future operations, including wind and solar generation
facilities.

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Additionally, Consumers is monitoring proposed changes to the listing status of
several species within its operational area due to an increase in
wildlife-related regulatory activity at federal and state levels. A change in
species listed under the Endangered Species Act may impact Consumers' costs to
mitigate its impact on protected species and habitats at certain existing
facilities as well as siting choices for new facilities.

Other Matters: Other electric environmental matters could have a material impact
on Consumers' outlook. For additional details on other electric environmental
matters, see Notes to the Unaudited Consolidated Financial Statements-Note 2,
Contingencies and Commitments-Consumers Electric Utility Contingencies-Electric
Environmental Matters.

Consumers Gas Utility Outlook and Uncertainties


Gas Deliveries: Consumers' gas customer deliveries are seasonal. The peak demand
for natural gas typically occurs in the winter due to colder temperatures and
the resulting use of natural gas as heating fuel.

Over the next five years, Consumers expects weather-normalized gas deliveries to
remain stable relative to 2022. This outlook reflects the effects of energy
waste reduction programs offset largely by modest growth in gas demand. Actual
delivery levels will depend on:

•weather fluctuations
•use by power producers
•availability and development of renewable energy sources
•gas price changes
•Michigan's economic conditions, including population trends and housing
activity
•the price or demand of competing energy sources or fuels
•energy efficiency and conservation impacts

Gas Rate Matters: Rate matters are critical to Consumers' gas utility business.
For additional details on rate matters, see Notes to the Unaudited Consolidated
Financial Statements-Note 1, Regulatory Matters and Note 2, Contingencies and
Commitments.

2022 Gas Rate Case: In December 2022, Consumers filed an application with the
MPSC seeking an annual rate increase of $212 million, based on a 10.25percent
authorized return on equity for the projected twelve-month period ending
September 30, 2024. The filing requests authority to recover new infrastructure
investment and related costs that are expected to allow Consumers to improve
system safety and reliability and reduce fugitive methane emissions. Presented
in the following table are the components of the requested increase in revenue:

Projected Twelve-Month Period Ending September 30           2024
Components of the requested rate increase
Investment in rate base                                  $  80
Operating and maintenance costs                             47
Cost of capital                                             63
Sales and other revenue                                     22
Total                                                    $ 212

The filing also seeks approval of cost deferral mechanisms that will allow
Consumers to defer for future recovery or refund pension and OPEB expense and
uncollectible accounts expense above the amounts used to set existing rates.

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Postretirement Benefits Expense Accounting Application: In January 2023,
Consumers filed an application with the MPSC, requesting authority to defer the
future recovery or refund of pension and OPEB expenses above or below the
amounts used to set existing rates, respectively. Consumers requested this
accounting treatment to begin in 2023 and to continue until rates are reset in
the 2022 gas rate case. In March 2023, the MPSC denied Consumers' application,
instead recommending that this would be more appropriately considered as part of
Consumers' current gas rate case.

Gas Pipeline and Storage Integrity and Safety: The U.S. Department of
Transportation's Pipeline and Hazardous Materials Safety Administration has
published various rules that expand federal safety standards for gas
transmission pipelines and underground storage facilities. Initial requirements
took effect in 2020, with future regulation phases to be released over numerous
years. To comply with these rules, Consumers will incur increased capital and
operating and maintenance costs to install and remediate pipelines and to expand
inspections, maintenance, and monitoring of its existing pipelines and storage
facilities.

Although associated capital or operating and maintenance costs relating to these
regulations could be material and cost recovery cannot be assured, Consumers
expects to recover such costs in rates consistent with the recovery of other
reasonable costs of complying with laws and regulations.

Gas Environmental Outlook: Consumers expects to incur response activity costs at
a number of sites, including 23 former MGP sites. For additional details, see
Notes to the Unaudited Consolidated Financial Statements-Note 2, Contingencies
and Commitments-Consumers Gas Utility Contingencies-Gas Environmental Matters.

Consumers' gas operations are subject to various federal, state, and local
environmental laws and regulations. Multiple environmental laws and regulations
are subject to litigation. Consumers' primary environmental compliance focus
includes, but is not limited to, the following matters.

Air Quality: Multiple air quality regulations apply, or may apply, to Consumers'
gas utility.


In March 2023, the EPA finalized a revision to CSAPR affecting Michigan. This
regulation will reduce interstate air pollution transport issues that EPA
modeling suggests contribute to downwind states attaining or maintaining
compliance with the NAAQS for ozone. While prior CSAPR regulations focused only
on electric generating units, this latest rule includes other emission sources,
including engines at natural gas compressor stations. Compliance with new NOx
emission limits is required by May 2026, unless the EPA approves an extension.
Consumers is currently evaluating the applicability of the regulation to its gas
business and expects to incur costs to retrofit or replace equipment at some of
its compressor stations.

In 2015, the EPA lowered the NAAQS for ozone and made it more difficult to
construct or modify natural gas compressor stations and other emission sources
in areas of the country that do not meet the ozone standard. In 2018, the EPA
designated certain areas of Michigan as not meeting the ozone standard.
Seven counties in southeastern Michigan were not in attainment with the ozone
standard by a 2021 regulatory deadline and, in March 2023, had their ozone
nonattainment designations increased from marginal to moderate. EGLE has
submitted an attainment redesignation request to EPA based on current ozone data
for these seven counties, and is waiting on a final decision. The EPA also
recently elevated the nonattainment status of three counties in western Michigan
from marginal to moderate. Some of Consumers' compressor stations are located in
these ozone nonattainment areas. Consequently, Consumers has initiated plans to
retrofit equipment to lower emissions in compliance with these new regulations
at two of its compressor stations located in the nonattainment areas.
Additionally, in January 2023, the EPA proposed lowering the NAAQS for
particulate matter. Consumers will continue to

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monitor NAAQS rulemakings and evaluate potential impacts to its compressor
stations and other applicable natural gas storage and delivery assets.


Greenhouse Gases: There is increasing interest at the federal, state, and local
levels in potential regulation of greenhouse gases or their sources. Such
regulation, if adopted, may involve requirements to reduce methane emissions
from Consumers' gas utility operations and carbon dioxide emissions from
customer use of natural gas. No such measures apply to Consumers at this time.

In 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 28percent reduction below 2005 levels of greenhouse
gas emissions by 2025. For additional details on the executive order, see
Consumers Electric Utility Outlook and Uncertainties-Electric Environmental
Outlook.

Under the Paris Agreement, an international agreement addressing greenhouse gas
emissions, the U.S. has committed to reduce greenhouse gas emissions by 50 to
52 percent from 2005 levels by 2030. The commitment made by the U.S. is not
binding without new Congressional legislation. Consumers continues to monitor
these initiatives and comment as appropriate. Consumers cannot predict the
impact of any potential future legislation or regulation on its gas utility.

Consumers is making voluntary efforts to reduce its gas utility's methane
emissions. Under its Methane Reduction Plan, Consumers has 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 likely be offset by purchasing and/or producing
renewable natural gas. To date, Consumers has reduced methane emissions by more
than 20 percent from a 2012 baseline.

In March 2022, Consumers also announced a net-zero greenhouse gas emissions
target for its entire natural gas system by 2050. This includes suppliers and
customers, and has an interim goal of reducing customer emissions by 20 percent
by 2030. Consumers' Natural Gas Delivery Plan, a 10-year strategic investment
plan to deliver safe, reliable, clean, and affordable natural gas to customers,
outlines ways in which Consumers can make early progress toward these goals in a
cost-effective manner, including energy waste reduction or energy efficiency,
carbon offsets, and renewable natural gas supply.

Consumers has already initiated work in these key areas, continuing to expand
its energy waste reduction targets, launching a program allowing gas customers
to purchase carbon offset credits on a voluntary basis, and announcing plans to
begin development of a renewable natural gas facility that will capture methane
from manure generated at a Michigan-based farm and convert it into renewable
natural gas. Consumers is evaluating and monitoring newer technologies to
determine their role in achieving Consumers' interim and long-term net-zero
goals, including hydrogen, biofuels, and synthetic methane; carbon capture
sequestration systems; and other innovative technologies.

NorthStar Clean Energy Outlook and Uncertainties


CMS Energy's primary focus with respect to its NorthStar Clean Energy businesses
is to maximize the value of generating assets, its share of which represents
1,478 MW of capacity, and to pursue opportunities for the development of
renewable generation projects.

NorthStar Clean Energy's operations may be subject to various federal, state,
and local environmental laws and regulations. Multiple environmental laws and
regulations are subject to litigation. NorthStar

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Clean Energy's primary environmental compliance focus includes, but is not
limited to, the following matters.


CSAPR requires Michigan and many other states to improve air quality by reducing
power plant emissions that, according to EPA modeling, contribute to
ground-level ozone in other downwind states. Since its 2015 effective date,
CSAPR has been revised several times. In March 2023, the EPA finalized a
revision to CSAPR affecting Michigan. This regulation establishes allowance
budgets for electric generating units in 22 states, including Michigan, between
2023 and 2029 and changes the mechanism for allocating such allowances on a
year-over-year basis beginning in 2026. NorthStar Clean Energy is evaluating
this rule and its impact on NorthStar Clean Energy's emission sources and may
incur costs in allowance purchases or equipment retrofits.

In 2015, the EPA lowered the NAAQS for ozone and made it more difficult to
construct or modify power plants and other emission sources in areas of the
country that do not meet the ozone standard. In 2018, the EPA designated certain
areas of Michigan as not meeting the ozone standard. Seven counties in
southeastern Michigan were not in attainment with the ozone standard by a
2021 regulatory deadline and, in March 2023, had their ozone nonattainment
designations increased from marginal to moderate. The DIG plant is within one of
these counties and, as a result, may be subject to additional permitting
restrictions in the event of any future increase in the nonattainment
designation.

Many of NorthStar Clean Energy's facilities maintain NPDES permits, which are
vital to the facilities' operations. NorthStar Clean Energy applies for renewal
of these permits every five years. Failure of EGLE to renew any NPDES permit, a
successful appeal against a permit, a change in the interpretation or scope of
NPDES permitting, or onerous terms contained in a permit could have a
significant detrimental effect on the operations of a facility.

For additional details regarding the new ozone NAAQS or CSAPR rule, see
Consumers Electric Utility Outlook and Uncertainties-Electric Environmental
Outlook.


Trends, uncertainties, and other matters related to NorthStar Clean Energy that
could have a material impact on CMS Energy's consolidated income, cash flows, or
financial position include:

•investment in and financial benefits received from renewable energy and energy
storage projects
•changes in energy and capacity prices
•severe weather events and climate change associated with increasing levels of
greenhouse gases
•changes in commodity prices on certain derivative contracts that do not qualify
for hedge accounting and must be marked to market through earnings
•changes in various environmental laws, regulations, principles, or practices,
or in their interpretation
•indemnity obligations assumed in connection with ownership interests in
facilities that involve tax equity financing
•representations, warranties, and indemnities provided by CMS Energy in
connection with sales of assets
•delays or difficulties in obtaining environmental permits for facilities
located in areas associated with environmental justice concerns

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In March 2022, the U.S. Department of Commerce announced it is opening inquiries
into whether manufacturers of solar modules that are produced in certain
countries using supplies obtained from China are circumventing antidumping and
countervailing duties which apply to Chinese modules. The U.S. Department of
Commerce has made an initial determination that four manufacturers have
circumvented tariffs. The remainder of this inquiry process is continuing, with
a final ruling expected in May 2023. In June 2022, the Biden Administration
paused for two years the imposition of duties that might result from the
U.S. Department of Commerce's pending inquiries. In addition, the Uyghur Forced
Labor Prevention Act, which was enacted in 2021 and became effective in
June 2022, along with an earlier withhold release order that U.S. Customs and
Border Protection issued in 2021, restrict the importation of goods sourced from
the Xinjiang region of China. Solar modules whose raw materials come from the
Xinjiang region are a key focus of these import laws. CMS Energy continues to
closely monitor these matters and their potential impacts on availability of
solar modules and timing associated with pending and planned solar projects.

For additional details regarding NorthStar Clean Energy's uncertainties, see
Notes to the Unaudited Consolidated Financial Statements-Note 2, Contingencies
and Commitments-Guarantees.

Other Outlook and Uncertainties


Litigation: CMS Energy, Consumers, and certain of their subsidiaries are named
as parties in various litigation matters, as well as in administrative
proceedings before various courts and governmental agencies, arising in the
ordinary course of business. For additional details regarding these and other
legal matters, see Notes to the Unaudited Consolidated Financial
Statements-Note 1, Regulatory Matters and Note 2, Contingencies and Commitments.

Employee Separation Program: In April 2023, CMS Energy and Consumers announced a
voluntary separation program for non-union employees. Under the program,
employees can elect to request separation, and management will decide which
requests to accept. In May 2023, management will communicate its decisions to
interested employees, who will have 45 days to decide whether to separate. The
program is expected to result in recognition of additional expense in the second
quarter of 2023; however, CMS Energy and Consumers expect to benefit from future
cost savings, as employee staffing levels will be better aligned with business
needs.

New Accounting Standards

There are no new accounting standards issued but not yet effective that are
expected to have a material impact on CMS Energy's or Consumers' consolidated
financial statements.

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CMS Energy Corporation
Consolidated Statements of Income (Unaudited)

                                                                       In

Millions, Except Per Share Amounts

Three Months Ended March 31                                                                                 2023             2022
Operating Revenue                                                                                                      $ 2,284          $ 2,374
Operating Expenses
Fuel for electric generation                                                                                               137              167
Purchased and interchange power                                                                                            341              455
Purchased power - related parties                                                                                           19               17
Cost of gas sold                                                                                                           547              468
Maintenance and other operating expenses                                                                                   431              334
Depreciation and amortization                                                                                              353              345
General taxes                                                                                                              142              132
Total operating expenses                                                                                                 1,970            1,918
Operating Income                                                                                                           314              456

Other Income (Expense)

Non-operating retirement benefits, net                                                                                      45               48
Other income                                                                                                                15                4
Other expense                                                                                                               (4)              (4)
Total other income                                                                                                          56               48
Interest Charges
Interest on long-term debt                                                                                                 144              121
Interest expense - related parties                                                                                           3                3
Other interest expense                                                                                                       -                1
Allowance for borrowed funds used during construction                                                                        -               (1)
Total interest charges                                                                                                     147              124
Income Before Income Taxes                                                                                                 223              380
Income Tax Expense                                                                                                          29               39
Income From Continuing Operations                                                                                          194              341
Income From Discontinued Operations, Net of Tax of $- and $1                                                                 -                4
Net Income                                                                                                                 194              345
Loss Attributable to Noncontrolling Interests                                                                              (10)              (8)
Net Income Attributable to CMS Energy                                                                                      204              353
Preferred Stock Dividends                                                                                                    2                2
Net Income Available to Common Stockholders                                                                            $   202          $   351


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In

Millions, Except Per Share Amounts


Three Months Ended March 31                                                                               2023            2022

Basic Earnings Per Average Common Share
Income from continuing operations per average common share
available to common stockholders

                                                                                     $ 0.69          $ 1.20

Income from discontinued operations per average common share
available to common stockholders

                                                                                          -            0.01
Basic earnings per average common share                                                                              $ 0.69          $ 1.21

Diluted Earnings Per Average Common Share
Income from continuing operations per average common share
available to common stockholders

                                                                                     $ 0.69          $ 1.20

Income from discontinued operations per average common share
available to common stockholders

                                                                                          -            0.01
Diluted earnings per average common share                                                                            $ 0.69          $ 1.21

The accompanying notes are an integral part of these statements.

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CMS Energy Corporation
Consolidated Statements of Comprehensive Income (Unaudited)

In Millions


Three Months Ended March 31                                                            2023            2022
Net Income                                                                                        $  194          $  345
Retirement Benefits Liability
Net gain arising during the period, net of tax of $- and $1                                            1               2

Amortization of net actuarial loss, net of tax of $- for both
periods

                                                                                                -               1

Derivatives

Unrealized gain on derivative instruments, net of tax of $- and
$1

                                                                                                     -               2

Other Comprehensive Income                                                                             1               5
Comprehensive Income                                                                                 195             350
Comprehensive Loss Attributable to Noncontrolling Interests                                          (10)             (8)
Comprehensive Income Attributable to CMS Energy                                                   $  205          $  358

The accompanying notes are an integral part of these statements.

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CMS Energy Corporation
Consolidated Statements of Cash Flows (Unaudited)

                                                                                                    In Millions
Three Months Ended March 31                                                               2023             2022
Cash Flows from Operating Activities
Net income                                                                        $     194          $   345
Adjustments to reconcile net income to net cash provided by operating
activities
Depreciation and amortization                                                           353              345
Deferred income taxes and investment tax credits                                         29               33

Other noncash operating activities and reconciling adjustments                         (19)             (27)

Changes in assets and liabilities
Accounts receivable and accrued revenue                                                 174             (121)
Inventories                                                                             391              213
Accounts payable and accrued rate refunds                                              (153)            (129)
Other current assets and liabilities                                                    (51)               7
Other noncurrent assets and liabilities                                                122               41
Net cash provided by operating activities                                             1,040              707
Cash Flows from Investing Activities
Capital expenditures (excludes assets placed under finance lease)                      (617)            (520)

Cost to retire property and other investing activities                                  (34)             (19)
Net cash used in investing activities                                                  (651)            (539)
Cash Flows from Financing Activities
Proceeds from issuance of debt                                                        1,205                -
Retirement of debt                                                                   (1,000)              (3)

Decrease in notes payable                                                               (20)               -
Issuance of common stock                                                                  4                4

Payment of dividends on common and preferred stock                                     (145)            (136)

Contribution from noncontrolling interest                                                 6                2

Other financing costs                                                                   (23)             (37)
Net cash provided by (used in) financing activities                                      27             (170)

Net Increase (Decrease) in Cash and Cash Equivalents, Including Restricted
Amounts

                                                                                 416               (2)

Cash and Cash Equivalents, Including Restricted Amounts, Beginning of
Period

                                                                                  182              476

Cash and Cash Equivalents, Including Restricted Amounts, End of Period

       $     598          $   474
Other Noncash Investing and Financing Activities

Noncash transactions
Capital expenditures not paid

$ 157 $ 128

The accompanying notes are an integral part of these statements.

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