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<SEC-DOCUMENT>0001299933-07-000078.txt : 20070105
<SEC-HEADER>0001299933-07-000078.hdr.sgml : 20070105
<ACCEPTANCE-DATETIME>20070105083705
ACCESSION NUMBER:		0001299933-07-000078
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20061221
ITEM INFORMATION:		Regulation FD Disclosure
ITEM INFORMATION:		Other Events
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20070105
DATE AS OF CHANGE:		20070105

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CONSUMERS ENERGY CO
		CENTRAL INDEX KEY:			0000201533
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRIC & OTHER SERVICES COMBINED [4931]
		IRS NUMBER:				380442310
		STATE OF INCORPORATION:			MI
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-05611
		FILM NUMBER:		07511884

	BUSINESS ADDRESS:	
		STREET 1:		ONE ENERGY PLAZA
		CITY:			JACKSON
		STATE:			MI
		ZIP:			49201
		BUSINESS PHONE:		5177881031

	MAIL ADDRESS:	
		STREET 1:		ONE ENERGY PLAZA
		CITY:			JACKSON
		STATE:			MI
		ZIP:			49201

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CONSUMERS POWER CO
		DATE OF NAME CHANGE:	19920703

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CMS ENERGY CORP
		CENTRAL INDEX KEY:			0000811156
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRIC & OTHER SERVICES COMBINED [4931]
		IRS NUMBER:				382726431
		STATE OF INCORPORATION:			MI
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-09513
		FILM NUMBER:		07511883

	BUSINESS ADDRESS:	
		STREET 1:		ONE ENERGY PLAZA
		CITY:			JACKSON
		STATE:			MI
		ZIP:			49201
		BUSINESS PHONE:		5177881031

	MAIL ADDRESS:	
		STREET 1:		ONE ENERGY PLAZA
		CITY:			JACKSON
		STATE:			MI
		ZIP:			49201
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>htm_17402.htm
<DESCRIPTION>LIVE FILING
<TEXT>
<!-- CoverPageHeader start -->
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 3.2//EN">
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<HEAD>
<TITLE> CMS Energy Corporation (Form: 8-K) </TITLE>
</HEAD>
<BODY TEXT="#000000" BGCOLOR="#FFFFFF" ALINK="#0000FF" HLINK="#FF0000" VLINK="#800080">
<A NAME="DOCUMENT_TOP">&nbsp;</A>
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		UNITED STATES<BR>
	SECURITIES AND EXCHANGE COMMISSION
</FONT>
<BR>
<FONT SIZE="2">
	WASHINGTON, D.C. 20549
</FONT>
<P ALIGN="CENTER">
<FONT SIZE="5">
	FORM 8-K
</FONT>
<FONT SIZE="2">

</FONT>
</P>
<P ALIGN="CENTER">
<FONT SIZE="3">
	CURRENT REPORT
</FONT>
</P>
<P ALIGN="CENTER">
<FONT SIZE="2">
	Pursuant to Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934
</FONT>
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<TABLE CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="100%">
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	&nbsp;
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	Date of Report (Date of Earliest Event Reported):
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	&nbsp;
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	December 21, 2006
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	CMS Energy Corporation
</FONT>
<FONT SIZE="2">
<BR>__________________________________________<BR>
	(Exact name of registrant as specified in its charter)
</FONT>
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	&nbsp;
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	Michigan
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<FONT SIZE="2">
	001-09513
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<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	38-2726431
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<FONT SIZE="2">
_____________________<BR>
	(State or other jurisdiction
</FONT>
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<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
_____________<BR>
	(Commission
</FONT>
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<TD ALIGN="CENTER" VALIGN="TOP">
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______________<BR>
	(I.R.S. Employer
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<FONT SIZE="2">
	of incorporation)
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<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	File Number)
</FONT>
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<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	Identification No.)
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	&nbsp;&nbsp;
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	&nbsp;
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	&nbsp;
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<FONT SIZE="2">
	One Energy Plaza, Jackson, Michigan
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<FONT SIZE="2">
	&nbsp;
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	49201
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<FONT SIZE="2">
_________________________________<BR>
	(Address of principal executive offices)
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<FONT SIZE="2">
	&nbsp;
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___________<BR>
	(Zip Code)
</FONT>
</TD>
</TR>
</TABLE>
</CENTER>
<CENTER>
<TABLE CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="100%">

<TR VALIGN="BOTTOM">
<TD WIDTH="51%">
	&nbsp;
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	&nbsp;
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	&nbsp;
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<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	Registrant&#146;s telephone number, including area code:
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</TD>
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<FONT SIZE="2">
	&nbsp;
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<TD ALIGN="CENTER" VALIGN="TOP">
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	517-788-0550
</FONT>
</TD>
</TR>
</TABLE>
</CENTER>
<P ALIGN="CENTER">
<FONT SIZE="2">
	Not Applicable
<BR>______________________________________________<BR>
	Former name or former address, if changed since last report
</FONT>
<P ALIGN="CENTER">
<FONT SIZE="2">
	&nbsp;
</FONT>
<!-- CoverPageRegistrant END --><!-- CoverPageRegistrant START -->
<P ALIGN="CENTER"><!-- -->
<FONT SIZE="6">
	Consumers Energy Company
</FONT>
<FONT SIZE="2">
<BR>__________________________________________<BR>
	(Exact name of registrant as specified in its charter)
</FONT>
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<TABLE CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="100%">
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<FONT SIZE="2">
	Michigan
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	001-05611
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	38-0442310
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
_____________________<BR>
	(State or other jurisdiction
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
_____________<BR>
	(Commission
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
______________<BR>
	(I.R.S. Employer
</FONT>
</TD>
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<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	of incorporation)
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	File Number)
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	Identification No.)
</FONT>
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<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;&nbsp;
</FONT>
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<FONT SIZE="2">
	&nbsp;
</FONT>
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<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
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<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	One Energy Plaza, Jackson, Michigan
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	49201
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
_________________________________<BR>
	(Address of principal executive offices)
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<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
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___________<BR>
	(Zip Code)
</FONT>
</TD>
</TR>
</TABLE>
</CENTER>
<CENTER>
<TABLE CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="100%">

<TR VALIGN="BOTTOM">
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	&nbsp;
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	&nbsp;
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	&nbsp;
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<FONT SIZE="2">
	Registrant&#146;s telephone number, including area code:
</FONT>
</TD>
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<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	517-788-0550
</FONT>
</TD>
</TR>
</TABLE>
</CENTER>
<P ALIGN="CENTER">
<FONT SIZE="2">
	n/a
<BR>______________________________________________<BR>
	Former name or former address, if changed since last report
</FONT>
<P ALIGN="CENTER">
<FONT SIZE="2">
	&nbsp;
</FONT>
<!-- CoverPageRegistrant END --><P><FONT SIZE="2">
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:</FONT>
</P>
<P><FONT SIZE="2">
[&nbsp;&nbsp;]&nbsp;&nbsp;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)<br>
[&nbsp;&nbsp;]&nbsp;&nbsp;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)<br>
[&nbsp;&nbsp;]&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))<br>
[&nbsp;&nbsp;]&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))<br>
</P></FONT><!-- PageBreak START -->
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<HR NOSHADE>
<DIV ALIGN="LEFT" STYLE="PAGE-BREAK-BEFORE:ALWAYS">
<A HREF="#DOCUMENT_TOP">
<U>
<B>
<FONT SIZE="2">Top of the Form</FONT>
</B>
</U>
</A>
</DIV>
<!-- PageBreak END --><!-- Item START -->
<P ALIGN="LEFT">
<FONT SIZE="2">
<B>
	Item 7.01 Regulation FD Disclosure.
</B>
</FONT>
</P>
<P ALIGN="LEFT">
<FONT SIZE="2">

</FONT>
</P>
<!-- Item END -->
<BR><BR><BR><BR><!-- Item START -->
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<FONT SIZE="2">
<B>
	Item 8.01 Other Events.
</B>
</FONT>
</P>
<P ALIGN="LEFT">
<FONT SIZE="2">
Securities Class Actions Settlement<br><br>On January 3, 2007, CMS Energy Corporation ("CMS Energy") and other parties entered into a Memorandum of Understanding, dated December 28, 2006 (the "MOU"), subject to court approval, regarding settlement of two class action lawsuits which alleged that the defendants violated United States securities laws and regulations by making allegedly false and misleading statements about CMS Energy&#x2019;s business and financial condition, particularly with respect to revenues and expenses recorded in connection with round-trip trading by CMS Marketing, Services and Trading Company.  The settlement was approved by a special committee of independent directors and by the full board of directors.  Both judged that it was in the best interests of shareholders to eliminate this business uncertainty.  The MOU is expected to lead to a detailed stipulation of settlement that will be presented to the assigned federal judge and the affected class in the first quarter of 2007.<br><br>B
eginning in May 2002, a number of complaints were filed against CMS Energy, Consumers Energy Company ("Consumers"), and certain officers and directors of CMS Energy and its affiliates.  The cases were consolidated into a single lawsuit (the "Shareholder Action") and in January 2005, the court granted a motion to dismiss Consumers and three of the individual defendants, but denied the motions to dismiss CMS Energy and the 13 remaining individual defendants.  In March 2006, the court conditionally certified a class consisting of "all persons who purchased CMS Common Stock during the period of October 25, 2000 through and including May 17, 2002 and who were damaged thereby."  The court excluded purchasers of CMS Energy&#x2019;s 8.75% Adjustable Convertible Trust Securities ("ACTS") from the class and, in response, a new class action lawsuit was filed on behalf of ACTS purchasers (the "ACTS Action") against the same defendants named in the Shareholder Action.   The settlement if approved will resolve both the Sh
areholder and ACTS Actions.     <br><br>Under the terms of the MOU, the litigation will be settled for a total of $200 million, including the cost of administering the settlement and any attorney fees the court awards.  CMS Energy will make a payment of $123.5 million plus an amount equivalent to interest on the outstanding unpaid settlement balance beginning on the date of preliminary approval of the Court and running until the balance of the settlement funds is paid into a settlement account.  Of this amount, CMS Energy&#x2019;s insurers will pay $76.5 million.  CMS Energy has established a $123.5 million reserve and taken a resulting pre-tax charge to 2006 earnings in the fourth quarter.  In entering into the MOU, CMS Energy makes no admission of liability under the Shareholder Action and the ACTS Action.<br><br>The settlement amount can be paid and the liquidity needs for CMS Energy&#x2019;s continuing operations can be met from cash from operations and available cash.    <br><br>Attached hereto as Exhib
its 99.1 and 99.2, respectively, are the MOU dated December 28, 2006 and a CMS Energy News Release dated January 5, 2007, which are incorporated by reference herein. <br><br>Arbitration Award in DIG/DFD Dispute<br><br>On January 5, 2007, CMS Energy announced that it had received the award of the American Arbitration Association (the "AAA") dated December 21, 2006 regarding disputes with Duke/Flour Daniel ("DFD") and others pertaining to the construction of the Dearborn Industrial Generation Project, a 710 megawatt natural gas-fueled cogeneration facility located in Dearborn, Michigan (the "DIG Project").<br><br>In October 2001, DFD, the primary construction contractor for the DIG Project, presented the Dearborn Industrial Generation, LLC, an indirect wholly owned subsidiary of CMS Energy and developer of the DIG Project ("DIG") with a change order to their construction contract and filed an action in Michigan state court against DIG, claiming contractual damages in the amount of $110 million, plus interest a
nd costs.  DFD also filed a construction lien for the $110 million.  DIG contested both of the claims made by DFD. In addition to drawing down on three letters of credit totaling approximately $30 million that it obtained from DFD, DIG filed an arbitration claim against DFD asserting in excess of an additional $75 million in claims against DFD.  The judge in the Michigan state court case entered an order staying DFD&#x2019;s prosecution of its claims in the court case and permitting the arbitration to proceed.  The arbitration considered the claims of both parties.  The arbitration hearing concluded on September 28, 2006.<br><br>The AAA arbitration panel awarded DIG approximately $25 million, including interest, on its various claims against DFD presented in the arbitration.  The panel also awarded DFD approximately $5 million on its claims and credited DFD approximately $30 million, plus $2 million in interest, for the three letters of credit DIG drew against DFD.  This resulted in a net amount due DFD, inc
lusive of interest, in the amount of approximately $12 million, which is payable upon entry of judgment in Wayne County Circuit Court and within the applicable time periods contained in the Michigan Court Rules.  CMS Energy has previously accrued a liability of approximately $30 million in this matter and has recorded fourth quarter pre-tax earnings of approximately $18 million because of the arbitration result.<br><br>Attached hereto as Exhibit 99.2 is a CMS Energy News Release dated January 5, 2007, which provides more information about the award and is incorporated by reference herein.
</FONT>
</P>
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<FONT SIZE="2">
<B>
	Item 9.01 Financial Statements and Exhibits.
</B>
</FONT>
</P>
<P ALIGN="LEFT">
<FONT SIZE="2">
(d) Exhibits.<br><br>99.1	Memorandum of Understanding dated December 28, 2006<br>99.2	CMS Energy&#x2019;s News Release dated January 5, 2007
</FONT>
</P>
<!-- Item END -->
<BR><BR><BR><BR><P ALIGN="LEFT" STYLE="FONT-SIZE: 10PT">This Form 8-K contains &#x201C;forward-looking statements&#x201D; as defined in Rule 3b-6 of the Securities Exchange Act of 1934, as amended, Rule 175 of the Securities Act of 1933, as amended, and relevant legal decisions. The forward-looking statements are subject to risks and uncertainties.  They should be read in conjunction with &#x201C;FORWARD-LOOKING STATEMENTS AND INFORMATION&#x201D; and &#x201C;RISK FACTORS&#x201D; each found in the MANAGEMENT&#x2019;S DISCUSSION AND ANALYSIS sections of CMS Energy&#x2019;s Form 10-K/A and Consumers&#x2019; Form 10-K for the Year Ended December 31, 2005 and as updated in CMS Energy&#x2019;s and Consumers&#x2019; subsequently filed Forms 10-Q (CMS Energy&#x2019;s and Consumers&#x2019;  &#x201C;FORWARD-LOOKING STATEMENTS AND INFORMATION&#x201D; and &#x201C;RISK FACTORS&#x201D; sections are incorporated herein by reference), that discuss important factors that could cause CMS Energy&#x2019;s and Consumers&#x2019; 
results to differ materially from those anticipated in such statements.</P><!-- PageBreak START -->
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<FONT SIZE="2">Top of the Form</FONT>
</B>
</U>
</A>
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<B>
	SIGNATURES
</B>
</FONT>
</P>
<P ALIGN="LEFT">
<FONT SIZE="2">
	Pursuant to the requirements of the Securities Exchange Act of 1934, the
	registrant has duly caused this report to be signed on its behalf by the
	undersigned hereunto duly authorized.
</FONT>
</P>
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	CMS Energy Corporation
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	&nbsp;&nbsp;
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<I>
	January 5, 2007
</I>
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<I>
	By:
</I>
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	&nbsp;
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<I>
	Thomas J. Webb
</I>
<BR>
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</TD>
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<I>
	Name: Thomas J. Webb
</I>
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<I>
	Title: Executive Vice President and Chief Executive Officer
</I>
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	Consumers Energy Company
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	&nbsp;&nbsp;
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<I>
	January 5, 2007
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	By:
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	&nbsp;
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<I>
	Thomas J. Webb
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<BR>
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	Name: Thomas J. Webb
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<I>
	Title: Executive Vice President and Chief Executive Officer
</I>
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<FONT SIZE="2">Top of the Form</FONT>
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	Exhibit&nbsp;Index
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	Exhibit No.
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	Description
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	99.1
</DIV>
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	&nbsp;
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Memorandum of Understanding dated December 28, 2006
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	99.2
</DIV>
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<TD WIDTH="15%">
<FONT SIZE="2">
	&nbsp;
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CMS Energy's News Release dated January 5, 2007
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<TYPE>EX-99.1
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<FILENAME>exhibit1.htm
<DESCRIPTION>EX-99.1
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<P align="center" style="font-size: 10pt"><FONT style="font-size: 12pt"><U><B>MEMORANDUM OF UNDERSTANDING</B></U></FONT>



<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, there is a pending action in the United States District Court for the Eastern
District of Michigan (the &#147;District Court&#148;) entitled <U>In re CMS Energy Corporation Securities
Litigation</U>, Civil No.&nbsp;02-CV-72004-DT (the &#147;Action&#148;), brought on behalf of all persons who
purchased CMS Energy Corporation (&#147;CMS&#148;) securities during the period from October&nbsp;25, 2000 through
and including March&nbsp;31, 2003 (the &#147;Class&nbsp;Period&#148;), excluding currently and previously named
Defendants, the officers and directors of CMS during all or any portion of the Class&nbsp;Period,
members of their immediate families and their legal representatives, heirs, successors or assigns
and any entity in which current and previously-named Defendants have or had a controlling interest
(the &#147;Class&#148;);


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, by Order of the Court dated September&nbsp;10, 2002, the following actions pending at that
time against CMS and certain individuals in the District Court were consolidated into the Action:
<U>Adrienne Green v. CMS Energy Corporation et al.</U>, 02-CV-72004 (GCS); <U>Gershon Chanowitz
v. CMS Energy Corporation et al.</U>, 02-CV-72045 (GCS); <U>Bruce F. Hansby v. CMS Energy
Corporation et al.</U>, 02-CV-72061 (ADT); <U>Craig Drimel v. CMS Energy Corporation et al.</U>,
02-CV-72101 (GCS); <U>Peter L. Knepell, Trustee for the Peter L. Knepell Pension Fund v. CMS
Energy Corporation et al.</U>, 02-CV-72108 (GCS); <U>Frank Emmerich v. CMS Energy Corporation et
al.</U>, 02-CV-72251 (GCS); <U>George T. Carofino v. CMS Energy Corporation et al.</U>,
02-CV-72326 (GCS); <U>Psychiatric Association of Ridgewood P.A. Defined Benefit Trust, U/A/D
1/1/94 v. CMS Energy Corporation et al.</U>, 02-CV-72338 (GCS); <U>Charles Harris IRA Account v.
CMS Energy Corporation et al.</U>, 02-CV-72584 (GCS); <U>H. Mark Solomon v. CMS Energy Corporation
et al.</U>, 02-CV-72610 (GCS); <U>Marvin Billik v. CMS Energy Corporation et al.</U>, 02-CV-72685
(GCS); <U>Jeffrey P. Jannett v. CMS Energy Corporation et al.</U>, 02-CV-72686 (GCS); <U>Milton
George v. CMS Energy Corporation et al.</U>, 02-CV-72687 (GCS); <U>John Inelli v. CMS Energy
Corporation et al.</U>, 02-CV-72818 (GCS); <U>Charles Brown v. CMS Energy Corporation et al.</U>,
02-CV-72830 (GEW); <U>Richard Garry Richardson v. CMS Energy Corporation et al.</U>,02-CV-72863
(BAF); <U>Melvin Billik v. CMS Energy Corporation et al.</U>, 02-CV-10155 (DML); and <U>Raymond
J. Potter v. CMS Energy Corporation et al.</U>, 02-CV-60136 (MOB);


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, by Order dated November&nbsp;14, 2002, the District Court appointed Andover Brokerage, LLC
and Herbert Steiger as lead plaintiffs (the &#147;Lead Plaintiffs&#148;) and the law firms of Entwistle &#038;
Cappucci LLP and Milberg Weiss Bershad Hynes &#038; Lerach LLP<sup>1</sup> as plaintiffs&#146; co-lead
counsel (&#147;Lead Counsel&#148;), and the law firms of Mantese, Miller, and Shea, PLLC<sup>2</sup>, and
Elwood S. Simon &#038; Associates as plaintiffs&#146; liaison counsel;


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, on May&nbsp;1, 2003, Lead Plaintiffs filed a Consolidated Class&nbsp;Action Complaint naming as
defendants CMS, Consumers Energy Company, William T. McCormick, Jr., David W. Joos, Alan M. Wright,
Tamela Pallas, Kenneth L. Way, Earl D. Holton, Kathleen R. Flaherty, Kenneth Whipple, Dennis DaPra,
John M. Deutch, James J. Duderstadt, W. U. Parfet, Percy A. Pierre, John B. Yasinsky, Victor J.
Fryling, and Preston D. Hopper;<sup>3</sup>


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, on or about July&nbsp;2, 2003, Defendants filed and served motions to dismiss the
Consolidated Amended Complaint;


<P align="left" style="font-size: 12pt; text-indent: 4%">WHERAS, on or about August&nbsp;6, 2003, Lead Plaintiffs opposed Defendants&#146; motions to dismiss the
Consolidated Amended Complaint;


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, on or about February&nbsp;12, 2004, Lead Plaintiffs filed and served a motion to amend the
Consolidated Amended Complaint;


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, on or about March&nbsp;31, 2004, the District Court issued an Opinion and Order that,
<I>inter alia</I>, granted in part, and denied in part Defendants&#146; motions to dismiss (including
Defendants&#146; motion to dismiss Counts III and IV brought on behalf of purchasers of CMS Premium
Equity Participating Security Units), and granted Lead Plaintiffs&#146; motion to amend the
Consolidated Amended Complaint;


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, on or about May&nbsp;26, 2004, Lead Plaintiffs filed and served a Second Amended
Consolidated Class&nbsp;Action Complaint;


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, on or about June&nbsp;21, 2004, Defendants filed and served motions to dismiss Lead
Plaintiffs&#146; Second Amended Consolidated Class&nbsp;Action Complaint;


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, on or about July&nbsp;19, 2004, Lead Plaintiffs opposed Defendants&#146; motions to dismiss the
Second Amended Consolidated Class&nbsp;Action Complaint;


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, on or about January&nbsp;7, 2005, the District Court issued an Opinion and Order that,
<I>inter ali</I>a, granted in part, and denied in part, Defendants&#146; motions to dismiss, and dismissed
claims asserted against defendants Consumers Energy Company, Tamela Pallas, Dennis DaPra, and
Victor J. Fryling;


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, on or about March&nbsp;16, 2005, Lead Plaintiffs filed and served a Conformed Third
Amended Consolidated Class&nbsp;Action Complaint (&#147;Third Complaint&#148;);


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, on or about September&nbsp;20, 2005, Defendants filed and served a motion for judgment on
the pleadings;


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, on or about October&nbsp;25, 2005, Lead Plaintiffs filed and served papers in opposition
to Defendants&#146; motion for judgment on the pleadings and a cross-motion for partial summary judgment
with respect to damages;


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, on December&nbsp;7, 2005, the District Court issued an Opinion and Order denying
Defendants&#146; motion for judgment on the pleadings and Lead Plaintiffs&#146; cross-motion for partial
summary judgment;


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, on June&nbsp;20, 2005, Lead Plaintiffs filed an amended motion for class certification;


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, on or about January&nbsp;18, 2006, CMS opposed Lead Plaintiffs&#146; amended motion for class
certification;


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, on or about March&nbsp;24, 2006, the District Court issued an Opinion and Order Granting
In Part, and Denying In Part, Plaintiffs&#146; Amended Motion For Class&nbsp;Certification, appointing as
Class&nbsp;Representatives, Andover Brokerage, LLC, Herbert Steiger, Louisiana School Employees&#146;
Retirement System, and Morris L. Cook; designating Entwistle &#038; Cappucci LLP and Milberg Weiss
Bershad &#038; Schulman LLP as co-lead counsel for the Class; and certifying a Class defined as follows:
<I>All persons who purchased CMS common stock during the period of October&nbsp;25, 2000 through and
including May&nbsp;17, 2002 and who were damaged thereby, excluding current and previously named
Defendants, the officers and directors of CMS at all relevant times, members of their immediate
families and their legal representatives, heirs, successors or assigns and any entity in which
current and previously named Defendants have or had a controlling interest</I>;


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, on June&nbsp;12, 2006, the United States Court of Appeals for the Sixth Circuit denied
CMS&#146;s petition for interlocutory appeal of the District Court&#146;s March&nbsp;24, 2006 class certification
order and Lead Plaintiffs&#146; cross-petition for interlocutory appeal;


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, on June&nbsp;21, 2006 the District Court issued an Opinion and Order denying Lead
Plaintiffs&#146; motion for reconsideration of the Court&#146;s March&nbsp;24, 2006 class certification order,
declining to include within the definition of the Class, purchasers of CMS 8.75% Adjustable
Convertible Trust Securities (&#147;8.75% ACTS&#148;);


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, the District Court has scheduled a trial of the Action to commence on March&nbsp;27, 2007
at 9:00 A.M.;


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, counsel for the parties have engaged in extensive, arm&#146;s-length discussions and
multiple mediation sessions with regard to the possible settlement of the Action;


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, it is anticipated that the action filed in the District Court entitled <U>Anthony
Breslin, et al. v. CMS Energy Corporation et al.</U>, Civil No.&nbsp;06-CV-13168, brought on behalf of
all persons or entities who purchased 8.75% ACTS between October&nbsp;25, 2000 and May&nbsp;17, 2002 (&#147;ACTS
Action&#148;), will be transferred to United States District Judge George C. Steeh (the &#147;Court&#148;) as a
case related to the Action (the Action and the claims asserted on behalf of the putative class in
the ACTS Action are sometimes hereafter collectively referred to as the &#147;Litigation&#148;);


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, Lead Plaintiffs on behalf of the Settlement Class (defined in Paragraph&nbsp;2 below) have
agreed in principle to the settlement of the Litigation because they believe that settlement will
provide substantial benefits to the Settlement Class, when weighed against the continued risk of
litigation, and because they have determined that it is in the best interests of the Settlement
Class to settle the Litigation on the terms set forth herein;


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, Defendants have agreed in principle to the settlement of the Litigation because they
believe it will halt the substantial expense, inconvenience and distraction of continued litigation
and finally put to rest any and all claims of the Settlement Class (described in Paragraph&nbsp;2 below)
arising out of or relating to the allegations in the Litigation;


<P align="left" style="font-size: 12pt; text-indent: 4%">NOW THEREFORE, the parties having reached an agreement in principle for the settlement of the
Litigation (the &#147;Settlement&#148;) on the terms and subject to the conditions set forth below and
subject to Court approval pursuant to Rule&nbsp;23 of the Federal Rules of Civil Procedure enter this
Memorandum of Understanding (&#147;Memorandum&#148;). This Memorandum is intended to be a binding agreement
among the parties. This Memorandum outlines the general terms of the proposed settlement and is
intended to be supplemented by a Stipulation and Agreement of Settlement (the &#147;Stipulation&#148;) and
accompanying papers that shall include customary settlement agreement provisions and shall embody
the terms set forth herein and such other and consistent terms as are agreed upon by counsel for
the Parties.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.&nbsp;The Litigation will be settled for the total sum of (i)&nbsp;Two Hundred Million Dollars
($200,000,000), and (ii)&nbsp;an amount equal to the interest on the amount of One Hundred Ninety-Eight
Million Five Hundred Thousand Dollars ($198,500,000) for the period beginning on the date of the
entry by the District Court of an order preliminarily approving the Stipulation, and ending on the
date that such total sum is deposited in the Settlement Fund Cash Account (described below),
calculated at the interest rate earned by 90-day U.S. Treasury bills over the same period. (The
total sum described in the prior sentence of this paragraph is hereafter referred to as the
&#147;Settlement Amount&#148;). Lead Plaintiffs acknowledge that (a)&nbsp;One Hundred Twenty-Three Million Five
Hundred Thousand Dollars ($123,500,000) of the Two Hundred Million Dollar amount described in
clause (i)&nbsp;of the first sentence of this paragraph, and the full amount described in clause (ii)&nbsp;of
the first sentence of this paragraph, shall be paid by CMS, and (b)&nbsp;Seventy-Six Million Five
Hundred Thousand Dollars ($76,500,000) of the Settlement Amount shall be paid by Defendants&#146;
insurers. The Settlement Amount shall be deposited in one or more interest-bearing accounts (the
&#147;Settlement Fund Cash Account&#148;) upon entry of the Order and Final Judgment reflecting the terms of
this Memorandum and the Stipulation by the District Court, except as otherwise provided for below
with respect to the amount of One Million Five Hundred Thousand Dollars ($1,500,000). The
Settlement Fund Cash Account, which will be held at one or more financial institutions to be
designated by the Lead Counsel prior to preliminary approval, will require the signatures of (i)
Vincent R. Cappucci or Andrew J. Entwistle of Entwistle &#038; Cappucci LLP; (ii)&nbsp;Robert A. Wallner or
Sanford P. Dumain of Milberg Weiss Bershad &#038; Schulman LLP, as well as a signature from (iii)&nbsp;Eric
Landau, Shawn Harpen, or Steven Aaronoff of McDermott Will &#038; Emery LLP (&#147;MWE&#148;), to release
deposited funds, and any such requests for release of deposited funds will be accompanied by
appropriate documentation supporting the expenditures. Plaintiffs&#146; Lead Counsel and MWE agree to
hold the funds in the Settlement Fund Cash Account in escrow for the purposes set forth herein.
All interest earned by the escrow account will accrue to the benefit of the Settlement Class. Upon
the Effective Date of the Settlement (as defined in Paragraph&nbsp;5 below), MWE will resign as a
co-signatory of the Settlement Fund Cash Account and Plaintiffs&#146; Lead Counsel will thereafter be
co-signatories on the Settlement Fund Cash Account. The parties hereto agree that the Settlement
Fund Cash Account is intended to be a Qualified Settlement Fund within the meaning of Treasury
Regulation &#167; 1.468B-1 and all taxes with respect to the earnings on the deposited funds will be
payable from the Settlement Fund Cash Account. Plaintiffs&#146; Lead Counsel will have sole
responsibility for administering the Settlement Fund Cash Account. CMS agrees to pay One Million
Five Hundred Thousand Dollars ($1,500,000) of the Settlement Amount into the Settlement Fund Cash
Account within five (5)&nbsp;days of preliminary approval of the Settlement by the District Court as an
advance to pay costs incurred in connection with the notice and the administration of the
Settlement prior to final approval by the Court. Without further approval from Defendants or the
Court, Plaintiffs&#146; Lead Counsel may draw down up to the $1,500,000 amount from the Settlement Fund
Cash Account to pay such costs. With respect to any such costs, counsel for Defendants will
execute whatever documentation is reasonably necessary to effect reimbursement from the Settlement
Fund Cash Account when and as such costs are incurred. The Settlement Fund Cash Account funds,
less any amounts incurred for notice, administration, and/or taxes, will revert to CMS if the
Settlement does not become effective.


<P align="left" style="font-size: 12pt; text-indent: 4%">2.&nbsp;The Settlement Class shall be as follows:


<P align="left" style="margin-left:8%; margin-right:8%; font-size: 12pt">All persons who purchased common stock and/or 8.75% Adjustable
Convertible Trust Securities of CMS Energy Corporation during the
period from October&nbsp;25, 2000 through and including March&nbsp;31, 2003,
excluding currently and previously named Defendants, officers and
directors of CMS and its subsidiaries during all or any portion of
such period, members of their immediate families and their legal
representatives, heirs, predecessors, successors and assigns, and
any entity in which any of the foregoing has a controlling
interest.


<P align="left" style="font-size: 12pt; text-indent: 4%">3.&nbsp;CMS shall cooperate in all reasonable ways with the claims administrator retained by Lead
Plaintiffs to administer and distribute the Settlement Amount, including providing a shareholder
list and a list of holders of the 8.75% ACTS for the Class&nbsp;Period, but shall not be responsible for
the administration of the Settlement. The shareholder list, list of holders of the 8.75% ACTS and
any other documentation provided by CMS shall only be used for purposes of this Settlement.


<P align="left" style="font-size: 12pt; text-indent: 4%">4.&nbsp;If for any reason the Effective Date does not (and cannot) occur, the funds on deposit in
the Settlement Fund Cash Account, less any taxes payable with respect to the taxable income of the
account, and less any administration expense payable shall be returned to CMS.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.&nbsp;The Effective Date will be the date by which all of the following have occurred: (a)&nbsp;the
Settlement has been approved by the District Court; (b)&nbsp;an Order and Final Judgment reflecting the
terms of this Memorandum and the Stipulation has been entered by the District Court and not vacated
or modified in any way affecting any party&#146;s rights or obligations hereunder, upon appeal or
otherwise; and (c)&nbsp;either (i)&nbsp;the time to appeal or otherwise seek review of the Order and Final
Judgment has expired without any appeal having been taken or review sought, or (ii)&nbsp;if an appeal is
taken or review sought, the expiration of five (5)&nbsp;days after an appeal or review will have been
finally determined by the highest court before which appeal or review is sought that upholds the
terms of the Stipulation and/or an Order and Final Judgment and is not subject to further judicial
review.


<P align="left" style="font-size: 12pt; text-indent: 4%">6.&nbsp;Lead Plaintiffs will move to dismiss the Litigation with prejudice (consistent with
Paragraph&nbsp;16 below) upon final approval of the Settlement and will deliver a release on their own
behalf and on behalf of the Settlement Class and the Settlement Class members&#146; predecessors,
successors, heirs, executors, administrators, and assigns (collectively &#147;Releasors&#148;) releasing the
Defendants, their past or present subsidiaries, parents, affiliates, partnerships, successors and
predecessors, officers, directors, shareholders, agents, employees, attorneys, auditors, advisors,
investment banks and advisors, underwriters and insurers, and the legal representatives, heirs,
executor, trustees, successors in interest or assigns of the Defendants (the &#147;Released Parties&#148;)
from any and all claims, debts, demands, rights, actions or causes of action or liabilities
whatsoever (including, but not limited to, any claims for damages, indemnification, equitable
relief, interest, attorneys&#146; fees, expert or consulting fees, and any other costs, expenses or
liability whatsoever), whether based on federal, state, local, statutory or common law or any other
law, rule or regulation, whether fixed or contingent, accrued or un-accrued, liquidated or
un-liquidated, at law or in equity, matured or un-matured, whether class or individual in nature,
including both known claims and unknown claims that (x)(i) have been, or in the future could be
asserted in the Litigation by Releasors or any of them against any of the Released Parties from the
beginning of time to the Effective Date, or (ii)&nbsp;could have been asserted in any forum by Releasors
or any of them against any of the Released Parties, and (y)&nbsp;arise out of, are based upon, or relate
in any way to the allegations, transactions, facts, matters or occurrences, representations or
omissions involved, set forth, or referred to in the Third Complaint and/or the ACTS Action&#146;s
Amended Complaint and relate to the purchase of shares of CMS common stock and/or 8.75% ACTS during
the Class&nbsp;Period (the &#147;Released Claims&#148;). For purposes of this Memorandum, &#147;Released Claims&#148;
excludes claims, if any, against the Released Parties arising under the Employee Retirement Income
Security Act of 1974, 29 U.S.C. &#167; 1001, <I>et seq. </I>(&#147;ERISA&#148;) that are and have been released pursuant
to the Class&nbsp;Action Settlement Agreement approved by the District Court in <U>In re CMS Energy
ERISA Litigation</U>, Case No.&nbsp;02-72834. The Defendants will release Lead Plaintiffs, the Class
Representatives, members of the Settlement Class and their counsel from any claims relating to the
institution, prosecution or settlement of the Litigation.


<P align="left" style="font-size: 12pt; text-indent: 4%">7.&nbsp;All applications to the District Court with respect to any aspect of this Settlement,
except as described herein, will be presented for determination to the Court.


<P align="left" style="font-size: 12pt; text-indent: 4%">8.&nbsp;Immediately upon execution of this Memorandum, the parties will use their reasonable best
efforts to have the ACTS Action designated as a related action to the Action.


<P align="left" style="font-size: 12pt; text-indent: 4%">9.&nbsp;Following execution of this Memorandum, the parties and their counsel will use their
reasonable best efforts to make final and to execute an appropriate Stipulation and such other
documentation as may be required or appropriate in order to obtain approval by the District Court
of the Settlement of the Litigation upon the terms set forth in this Memorandum.


<P align="left" style="font-size: 12pt; text-indent: 4%">10.&nbsp;Promptly upon execution of the Stipulation, Lead Plaintiffs will apply to the District
Court for preliminary approval of the Settlement and for the scheduling of a hearing for
consideration of final approval of the Settlement and Lead Counsel&#146;s application for an award of
attorneys&#146; fees and expenses. The parties will use their reasonable best efforts to obtain final
District Court approval of the Settlement. The Stipulation will provide (among other terms) that:
(a)&nbsp;the District Court will order preliminary approval of the Stipulation and Settlement and direct
that notice of the Settlement be provided to the Settlement Class; (b)&nbsp;the $1,500,000 advance
described in Paragraph&nbsp;1 above will be provided; (c)&nbsp;the Defendants have denied and continue to
deny that they have engaged in any conduct or committed any act or omission giving rise to any
liability and/or violation of law, and state that they are entering into this Settlement to
eliminate the burden and expense of further litigation; (d)&nbsp;neither the Settlement nor any of its
terms will constitute an admission or finding of wrongful conduct, acts or omission; (e)&nbsp;upon final
approval, the District Court will enter an Order and Final Judgment in favor of the Defendants
dismissing with prejudice the Litigation and barring class members from asserting the Released
Claims against the Released Parties; (f)&nbsp;the remaining amount of the Settlement Amount (One Hundred
Ninety-Eight Million Five Hundred Thousands Dollars ($198,500,000) plus an amount equal to interest
on that amount calculated in accordance with Paragraph&nbsp;1(ii) above), shall be paid within five (5)
business days of the entry by the District Court of the Order and Final Judgment; (g)&nbsp;the
allocation of the net proceeds of the Settlement will be subject to a plan of allocation to be
proposed by Lead Counsel and approved by the District Court; (h)&nbsp;the Defendants will take no
position with respect to such proposed plan of allocation or such plan as may be approved by the
District Court; (i)&nbsp;such plan of allocation is a matter separate and apart from the proposed
Settlement between the parties, and any decision by the District Court concerning the plan of
allocation will not affect the validity or finality of the proposed Settlement; and (j)&nbsp;Lead
Plaintiffs may apply for and receive an award of attorneys&#146; fees and reimbursement of reasonable
litigation expenses from the Settlement Fund Cash Account, but District Court approval of the
Settlement shall in no way be conditioned upon approval of such an award.


<P align="left" style="font-size: 12pt; text-indent: 4%">11.&nbsp;Plaintiffs&#146; Lead Counsel intend to request no more than 22.5% of the Settlement Amount
(plus interest thereon) for attorneys&#146; fees, plus expenses. Plaintiffs&#146; Lead Counsel&#146;s approved
fees and expenses will be payable from the Settlement Fund Cash Account immediately upon entry by
the District Court of an Order approving attorneys&#146; fees and reimbursement of expenses, subject to
the obligation of such counsel to refund the amount received plus interest earned if the fee or
expense award is reduced or reversed, if the award order does not become final or if the Effective
Date does not occur. If Lead Counsel seek to receive attorneys&#146; fees and expenses following an
award by the District Court but prior to the Effective Date, CMS&#146;s counsel may request the
provision of a reasonable and adequate security for repayment including but not limited to the
posting of a letter of credit.


<P align="left" style="font-size: 12pt; text-indent: 4%">12.&nbsp;Any and all costs associated with the Settlement, including but not limited to, any
administrative costs and the cost of providing notice to the Settlement Class, shall be reimbursed
from the Settlement Fund Cash Account (and if such costs exceed $1,500,000, they shall be subject
to District Court approval), but Defendants shall have no liability or responsibility for, or
involvement with, any such costs.


<P align="left" style="font-size: 12pt; text-indent: 4%">13.&nbsp;Notwithstanding anything else in this Memorandum, CMS may in its discretion but is not
required to unilaterally withdraw from and terminate this Settlement if the threshold for requests
for exclusion from the Settlement Class has been reached as defined in a Supplemental Agreement.
The Supplemental Agreement shall not be filed with the District Court unless a dispute arises about
its terms or the District Court so orders.


<P align="left" style="font-size: 12pt; text-indent: 4%">14.&nbsp;Judgment shall be entered in appropriate form dismissing the Litigation with prejudice as
against Defendants and barring any member of the Settlement Class from asserting any Released
Claims against the Released Parties.


<P align="left" style="font-size: 12pt; text-indent: 4%">15.&nbsp;The Defendants deny the claims in the Action and the ACTS Action.


<P align="left" style="font-size: 12pt; text-indent: 4%">16.&nbsp;Whether or not this Memorandum becomes final, the parties expressly agree that this
Memorandum, the Stipulation, and their respective contents, and any and all statements,
negotiations, documents and discussions associated with them and the Settlement shall not be deemed
or construed to be an admission or evidence of any violation by any Released Party or any statute
or law or of any liability or wrongdoing or of the truth of any of the claims or allegations
against any of the Defendants contained in the Third Complaint and the ACTS Action&#146;s Amended
Complaint or any other pleading in the Litigation, and evidence thereof shall not be discoverable,
admissible or used, directly or indirectly, in any way against any of either Releasors or the
Released Parties, whether in the Litigation or in any other action or proceeding. If the
Settlement outlined in this Memorandum and the Stipulation is not approved by the Court or is
terminated, the Settlement will be without prejudice, and none of its terms will be effective or
enforceable, except to the extent costs of notice and administration have been incurred or expended
pursuant to Paragraph&nbsp;1 above and with respect to the credit described in Paragraph&nbsp;4 above; the
Parties will revert to their litigation positions immediately prior to the execution of this
Memorandum, including their positions concerning class certification.


<P align="left" style="font-size: 12pt; text-indent: 4%">17.&nbsp;In the event of any merger, reorganization, or sale of CMS, CMS shall be responsible to
assure that the acquiring or successive entity assumes CMS&#146;s obligations under this Memorandum.


<P align="left" style="font-size: 12pt; text-indent: 4%">18.&nbsp;This Memorandum may be executed in counterparts, including by signature transmitted by
facsimile. Each counterpart when so executed will be deemed to be an original, and all such
counterparts together will constitute the same instrument. The undersigned signatories represent
that they have authority from their clients to execute this Memorandum. The terms of this
Memorandum and Settlement will inure to and be binding upon the parties and their successors in
interest.


<P align="left" style="font-size: 12pt; text-indent: 4%">19.&nbsp;The District Court will retain jurisdiction over this Memorandum, the Stipulation, and the
Settlement contemplated therein for all purposes, including the enforcement of their terms by any
party thereto and any disputes arising from or relating to this Memorandum, any Stipulation, or the
Settlement.


<P align="left" style="font-size: 12pt">Dated: December&nbsp;28, 2006

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="51%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="44%">&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD nowrap align="left"><B>ENTWISTLE &#038; CAPPUCCI LLP</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>MILBERG WEISS BERSHAD &#038; SCHULMAN LLP</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By: /s/ Vincent R. Cappucci<BR>
Vincent R. Cappucci<BR>
280 Park Avenue, 26th Floor West<BR>
New York, NY 10017<BR>
<I>Lead Counsel and Attorneys for Lead<BR>
Plaintiff Andover Brokerage, LLC</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By: /s/ Robert A. Wallner<BR>
Robert A. Wallner<BR>
One Pennsylvania Plaza<BR>
New York, NY 10119-0165<BR>
<I>Lead Counsel and Attorneys for Lead<BR>
Plaintiff Herbert Steiger</I></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>MCDERMOTT WILL &#038; EMERY LLP</B><BR>
By: /s/ Eric Landau<BR>
Eric Landau<BR>
18191 Von Karman Avenue, Suite&nbsp;500<BR>
Irving, CA 92612<BR>
<I>Attorneys for Defendants CMS Energy<BR>
Corporation, Kenneth L. Way, Earl D.<BR>
Holton, Kathleen R. Flaherty, Kenneth<BR>
Whipple, John M. Deutch, James J.<BR>
Duderstadt, Percy A. Pierre, and John<BR>
B. Yasinsky</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><BR>
<BR>
<BR>
<BR>
<B>WILLIAMS &#038; CONNOLLY, LLP</B><BR>
By: /s/ Ryan T. Scarborough<BR>
Ryan T. Scarborough<BR>
725 Twelfth Street, NW<BR>
Washington, DC 2005-5901<BR>
<I>Attorneys for Defendant William T.<BR>
McCormick, Jr.</I></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>SULLIVAN &#038; CROMWELL LLP</B><BR>
By: /s/ Daryl A. Libow<BR>
Daryl A. Libow<BR>
1701 Pennsylvania Avenue, NW, Suite<BR>
800<BR>
Washington, DC 20006-5805<BR>
<I>Attorneys for Defendant W. U. Parfet</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><BR>
<B>DECHERT LLP</B><BR>
By: /s/ Shari Steinberg<BR>
Shari Steinberg<BR>
30 Rockefeller Plaza<BR>
New York, NY 10112-2200<BR>
<I>Attorneys for Defendant David W. Joos</I></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>CLEARY GOTTLIEB STEEN &#038; HAMILTON LLP</B><BR>
By: /s/ Lewis J. Liman<BR>
Lewis J. Liman<BR>
One Liberty Plaza<BR>
New York, NY 10006<BR>
<I>Attorneys for Defendant Alan M. Wright</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>CADWALADER, WICKERSHAM &#038; TAFT LLP</B><BR>
By: /s/ James K. Robinson<BR>
James K. Robinson<BR>
1201 F. Street, NW, Suite&nbsp;1100<BR>
Washington, DC 20004<BR>
<I>Attorneys for Defendant Preston D.<BR>
Hopper</I></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 12pt"><FONT style="font-size: 12pt"><sup>1</sup> Milberg Weiss Bershad Hynes &#038; Lerach LLP changed
its name to Milberg Weiss Bershad &#038; Schulman LLP.
</FONT>

<P align="left" style="font-size: 12pt"><FONT style="font-size: 12pt"><sup>2</sup> Mantese, Miller, and Shea PLLC changed its name
and is now The Miller Law Firm, P.C.
</FONT>

<P align="left" style="font-size: 12pt"><FONT style="font-size: 12pt"><sup>3</sup> CMS, William T. McCormick, Jr., David W. Joos,
Alan M. Wright, Kenneth L. Way, Earl D. Holton, Kathleen R. Flaherty, Kenneth
Whipple, John M. Deutch, James J. Duderstadt, W. U. Parfet, Percy A. Pierre,
John B. Yasinsky, and Preston D. Hopper are collectively referred to here in as
the <FONT style="font-family: Symbol">&#147;</FONT>Defendants<FONT style="font-family: Symbol">&#148;</FONT>.
</FONT>


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<P align="center" style="font-size: 10pt"><FONT style="font-size: 12pt"><B>CMS ENERGY ANNOUNCES PRELIMINARY AGREEMENT TO SETTLE SHAREHOLDER CLASS ACTION LAWSUITS AND<BR>
ARBITRATION DECISION INVOLVING THE DEARBORN INDUSTRIAL GENERATION PROJECT</B></FONT>



<P align="left" style="font-size: 12pt; text-indent: 6%">JACKSON, Mich., Jan. 5, 2007 &#150; CMS Energy announced today that it has reached a preliminary
agreement to settle shareholder class action lawsuits linked to round-trip energy trading that took
place at its former Texas-based subsidiary between 2000 and 2002.


<P align="left" style="font-size: 12pt; text-indent: 6%">It also announced an arbitration panel decision in a dispute with Duke/Fluor Daniel over the
construction of its Dearborn Industrial Generation facility.


<P align="left" style="font-size: 12pt; text-indent: 6%">In the shareholder class action lawsuits, CMS Energy and lawyers for the shareholders have
signed a memorandum of understanding that is expected to lead to a detailed stipulation of
settlement that will be presented to the assigned federal judge and the affected class in the first
quarter of 2007.


<P align="left" style="font-size: 12pt; text-indent: 6%">James Brunner, CMS Energy&#146;s general counsel, said the memorandum of understanding moves the
Company a step closer to eliminating a major legal and business uncertainty.


<P align="left" style="font-size: 12pt; text-indent: 6%">&#147;We now have the legal framework for a settlement and our focus in the coming weeks will be on
moving forward to finalize the details of an agreement and presenting that to the court,&#148; Brunner
said. &#147;This memorandum of understanding and the settlement it represents, if approved by the
court, along with the arbitration result in the Dearborn Industrial Generation matter, will go a
long way toward resolving the outstanding major litigation issues facing the Company and its
affiliates.&#148;


<P align="left" style="font-size: 12pt; text-indent: 6%">The shareholder lawsuits contend that CMS Energy made false and misleading statements about
its business and financial conditions by including the results of round-trip energy trades carried
out by a Texas-based subsidiary in its revenues and expenses. CMS Energy has defended itself
vigorously against these claims since their inception.


<P align="left" style="font-size: 12pt; text-indent: 6%">The Company restated its financial reports for 2000 and 2001 to eliminate all revenues and
expenses from the round-trip trades, sold the majority of the Texas office trading business, phased
out most of its remaining operations and closed the subsidiary&#146;s Texas office by the end of 2003.
It reached a settlement on these matters with the U.S. Securities and Exchange Commission in March
2004 without any fine.


<P align="left" style="font-size: 12pt; text-indent: 6%">Under the terms of the memorandum of understanding, the litigation will be settled for $200
million, including the cost of administering the settlement and any attorney fees the court awards.
CMS Energy will make a payment of $123.5&nbsp;million plus an amount equivalent to interest on the
outstanding unpaid settlement balance beginning on the date of preliminary approval by the court
and running until the balance of the settlement funds is paid into a settlement account. The
Company&#146;s insurers will pay $76.5&nbsp;million toward the settlement.


<P align="left" style="font-size: 12pt; text-indent: 6%">CMS Energy has established a $123.5&nbsp;million reserve and taken a resulting pre-tax charge to
2006 earnings in the fourth quarter. In entering into the memorandum of understanding, the Company
makes no admission of liability under the class action complaints.


<P align="left" style="font-size: 12pt; text-indent: 6%">The settlement was approved by a special committee of independent directors and the full Board
of Directors. Both decided that the settlement is in the best interests of the Company and its
shareholders because it halts the substantial expense, uncertainty, inconvenience and distraction
of continued litigation.


<P align="left" style="font-size: 12pt; text-indent: 6%">In an unrelated matter, CMS Energy announced today that it had received a decision from the
arbitration panel handling a dispute between its Dearborn Industrial Generation, LLC (DIG)
affiliate and Duke/Fluor Daniel (DFD)&nbsp;over the construction of the Dearborn Industrial Generation
facility.


<P align="left" style="font-size: 12pt; text-indent: 6%">DIG previously had drawn $30&nbsp;million from three letters of credit placed by DFD in connection
with the project. The arbitration panel awarded DIG approximately $25&nbsp;million, including interest,
on its various claims against DFD presented in the arbitration. The panel also awarded DFD
approximately $5&nbsp;million on its claims and credited DFD approximately $30&nbsp;million, plus $2&nbsp;million
in interest, for the three letters of credit that DIG drew against DFD.


<P align="left" style="font-size: 12pt; text-indent: 6%">This resulted in a net amount due DFD, including interest, of about $12&nbsp;million, which is
payable upon entry of judgment in Wayne County Circuit Court and within the applicable time periods
contained in the Michigan Court Rules. CMS Energy previously had created a reserve of about $30
million corresponding to the letter of credit draws, and recorded fourth quarter pre-tax earnings
of approximately $18&nbsp;million because of the arbitration result.


<P align="left" style="font-size: 12pt; text-indent: 6%">CMS Energy (NYSE: CMS) is a Michigan-based company that has as its primary business
operations an electric and natural gas utility, natural gas pipeline systems, and independent power
generation.


<P align="center" style="font-size: 12pt"># # #



<P align="left" style="font-size: 12pt">This news release contains &#147;forward-looking statements&#148; as defined in Rule&nbsp;3b-6 of the Securities
Exchange Act of 1934, as amended, Rule&nbsp;175 of the Securities Act of 1933, as amended, and relevant
legal decisions. The forward-looking statements are subject to risks and uncertainties. They
should be read in conjunction with &#147;Forward-Looking Statements and Risk Factors&#148; found in the
Management Discussion and Analysis sections of CMS Energy&#146;s and Consumers Energy&#146;s Forms 10-Q for
the fiscal quarter ended Sept. 30, 2006 (CMS Energy&#146;s and Consumers Energy&#146;s &#147;Forward-Looking
Statements and Risk Factors&#148; sections are both incorporated herein by reference), that discuss
important factors that could cause CMS Energy&#146;s and Consumers Energy&#146;s results to differ materially
from those anticipated in such statements.


<P align="left" style="font-size: 12pt"><I>For more information on CMS Energy, please visit our web site at: www.cmsenergy.com</I>
<BR>
<I>Media Contacts: Jeff Holyfield, 517/788-2394 or Dan Bishop, 517/788-2395</I>
<BR>
<I>Investment Analyst Contact: CMS Energy Investor Relations, 517/788-2590</I>



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