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<SEC-DOCUMENT>0000950124-08-001159.txt : 20080311
<SEC-HEADER>0000950124-08-001159.hdr.sgml : 20080311
<ACCEPTANCE-DATETIME>20080311161519
ACCESSION NUMBER:		0000950124-08-001159
CONFORMED SUBMISSION TYPE:	424B2
PUBLIC DOCUMENT COUNT:		3
FILED AS OF DATE:		20080311
DATE AS OF CHANGE:		20080311

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:		424B2
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-120611
		FILM NUMBER:		08680773

	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
</SEC-HEADER>
<DOCUMENT>
<TYPE>424B2
<SEQUENCE>1
<FILENAME>k24642b2e424b2.htm
<DESCRIPTION>PROSPECTUS SUPPLEMENT PURSUANT TO RULE 424(B)(2)
<TEXT>
<HTML>
<HEAD>
<TITLE>e424b2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Filed
Pursuant to Rule 424(b)2<br>
Registration Statement No. 333-120611
</DIV>




<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED DECEMBER 1, 2004</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>$250,000,000</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><IMG src="k24642b2k2464201.gif" alt="(CONSUMERS ENERGY LOGO)">

</DIV>

<DIV align="Center" style="font-size: 14pt; margin-top: 6pt"><B>Consumers Energy Company</B>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>5.65%
First Mortgage Bonds due 2018</B>
</DIV>



<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Bonds will bear interest at the rate of 5.65% per year. Interest on the Bonds will be
paid semi-annually in arrears on March&nbsp;15 and September&nbsp;15,
commencing on September 15, 2008, and on the date of
maturity. The Bonds will mature on September&nbsp;15, 2018. The Bonds will be issued only in denominations
of $1,000 and integral multiples of $1,000. We may redeem some or all of the Bonds at our option
at any time at 100% of their principal amount, plus any applicable premium thereon at the time of
redemption, plus accrued and unpaid interest to the redemption date. See &#147;Description of the Bonds
&#151; Optional Redemption.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Bonds will rank equally in right of payment with our other existing or future first
mortgage bonds issued either independently or as collateral for outstanding or future indebtedness.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>This investment involves risk. See &#147;Risk Factors&#148; beginning on page S-8.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus supplement or the
accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal
offense.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Per Bond</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Total</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Public Offering Price</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">99.617%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$249,042,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Underwriting Discount</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.650%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$1,625,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Proceeds to Consumers (before expenses)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">98.967%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$247,417,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest
on the Bonds will accrue from March&nbsp;14, 2008 to date of delivery.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The underwriters expect to deliver the Bonds through the book-entry facilities of The
Depository Trust Company in New York City on or about March&nbsp;14, 2008 against payment therefor.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Joint Book-Running Managers
</DIV>

<DIV align="center">
<TABLE style="font-size: 14pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%"></TD>
    <TD width="5%"></TD>
    <TD width="30%"></TD>
    <TD width="5%"></TD>
    <TD width="30%"></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top"><B>Barclays Capital</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>BNP PARIBAS</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top"><B>Scotia Capital</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%"></TD>
    <TD width="5%"></TD>
    <TD width="47%"></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top"><B>RBS Greenwich Capital</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top"><B>Wedbush Morgan Securities Inc.</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%"></TD>
    <TD width="5%"></TD>
    <TD width="30%"></TD>
    <TD width="5%"></TD>
    <TD width="30%"></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top"><B>Comerica Securities</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>Wells Fargo Securities</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top"><B>The Williams Capital Group, L.P.</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">The
date of this prospectus supplement is March&nbsp;10, 2008.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABLE OF CONTENTS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="92%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="1" style="border-bottom: 1px solid #000000"><B>Page</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Prospectus Supplement</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#102">ABOUT THIS PROSPECTUS SUPPLEMENT</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">S-2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#103">WHERE YOU CAN FIND MORE INFORMATION</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">S-3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#104">SUMMARY</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">S-4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#105">RISK FACTORS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">S-8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#106">USE OF PROCEEDS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">S-9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#107">RATIO OF EARNINGS TO FIXED CHARGES</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">S-9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#108">CAPITALIZATION</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">S-10</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#109">DESCRIPTION OF THE BONDS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">S-11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#110">RATINGS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">S-17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#111">UNDERWRITING</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">S-17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#112">LEGAL OPINIONS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">S-18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#113">EXPERTS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">S-18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Prospectus</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#115">SUMMARY</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#116">RISK FACTORS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#117">WHERE YOU CAN FIND MORE INFORMATION</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#118">CONSUMERS ENERGY COMPANY</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#119">CONSUMERS ENERGY COMPANY TRUSTS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#120">USE OF PROCEEDS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#121">RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO
COMBINED FIXED CHARGES AND PREFERENCE DIVIDENDS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#122">DESCRIPTION OF SECURITIES</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#123">PLAN OF DISTRIBUTION</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#124">LEGAL MATTERS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#125">EXPERTS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">25</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>You should rely only on the information contained in or incorporated by reference in this
prospectus supplement and the accompanying prospectus or to documents to which we have referred
you. We have not authorized anyone to provide you with different information. We are not, and the
underwriters are not, making an offer of these securities in any jurisdiction where the offer is
not permitted. This document may only be used where it is legal to sell these securities. You
should not assume that the information contained in this prospectus supplement and the accompanying
prospectus is accurate as of any date other than the date on the front of each such document.</B>
</DIV>
<DIV align="left">
<A name="102"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ABOUT THIS PROSPECTUS SUPPLEMENT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This document is in two parts. The first part is this prospectus supplement, which describes
the terms of this offering of Bonds and also adds to and updates information contained in the
accompanying prospectus and the documents incorporated by reference into the accompanying
prospectus. The second part is the accompanying prospectus, which contains a description of the
securities registered by us. To the extent there is a conflict between the information contained
or incorporated by reference in this prospectus supplement, on the one hand, and the information
contained in the accompanying prospectus or any document incorporated by reference therein, on the
other hand, the information in this prospectus supplement shall control.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus supplement and the accompanying prospectus are part of a registration
statement that we filed with the Securities and Exchange Commission (&#147;<B>SEC</B>&#148;) using a &#147;shelf&#148;
registration process. Under the registration statement, we may sell securities, including Bonds,
up to a dollar amount of $1,500,000,000, of which this offering is a part, of which $400,000,000
currently is available for issuance (without giving effect to this offering).
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="103"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>WHERE YOU CAN FIND MORE INFORMATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We file reports, proxy statements and other information with the SEC under File No.&nbsp;1-5611.
Our SEC filings are available over the Internet at the SEC&#146;s web site at http://www.sec.gov. You
may also read and copy any document we file at the SEC&#146;s public reference room at 100 F Street, NE,
Room&nbsp;1580, Washington, DC, 20549. Please call the SEC at 1-800-SEC-0330 for more information on
the public reference rooms and their copy charges. You may also inspect our SEC reports and other
information at the New York Stock Exchange, 20 Broad Street, New York, New York, 10005. You can
find additional information about us, including our Annual Report on Form 10-K for the year ended
December&nbsp;31, 2007, on the web site of our parent company at http://www.cmsenergy.com. The
information on this web site is not a part of this prospectus supplement and the accompanying
prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are &#147;incorporating by reference&#148; information into this prospectus supplement and the
accompanying prospectus. This means that we are disclosing important information by referring to
another document filed separately with the SEC. The information incorporated by reference is
deemed to be part of this prospectus supplement and the accompanying prospectus, except for any
information superseded by information in this prospectus supplement and the accompanying
prospectus. This prospectus supplement and the accompanying prospectus incorporate by reference
the documents set forth below that we have previously filed with the SEC. These documents contain
important information about us and our finances.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Annual Report on Form 10-K for the year ended December&nbsp;31, 2007 filed on February&nbsp;21, 2008</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Current Reports on Form 8-K filed on January&nbsp;11, 2008 and January&nbsp;30, 2008</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The documents filed by us with the SEC pursuant to Section&nbsp;13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the &#147;<B>Exchange Act</B>&#148;), after the date of this prospectus
supplement, until the offering of the Bonds pursuant to this prospectus supplement is terminated,
are also incorporated by reference into this prospectus supplement and the accompanying prospectus.
Any statement contained in such document will be deemed to be modified or superseded for purposes
of this prospectus supplement and the accompanying prospectus to the extent that a statement
contained in this prospectus supplement and the accompanying prospectus or any other subsequently
filed document modifies or supersedes such statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will provide, upon your oral or written request, a copy of any or all of the information
that has been incorporated by reference in this prospectus supplement and the accompanying
prospectus but not delivered with this prospectus supplement and the accompanying prospectus. You
may request a copy of these filings at no cost by writing or telephoning us at the following
address:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Consumers Energy Company<BR>
One Energy Plaza<BR>
Jackson, Michigan 49201<BR>
Tel: (517)&nbsp;788-0550<BR>
Attention: Office of the Secretary

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->S-3<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 11px;">


<DIV align="left">
<A name="104"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SUMMARY</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>This summary may not contain all the information that may be important to you. You should
read this prospectus supplement and the accompanying prospectus and the documents incorporated by
reference into this prospectus supplement and the accompanying prospectus in their entirety before
making an investment decision. The terms &#147;</I><B><I>Consumers</I></B><I>&#148;, &#147;</I><B><I>Company</I></B><I>&#148;, &#147;</I><B><I>our</I></B><I>&#148;, &#147;</I><B><I>us</I></B><I>&#148;, and &#147;</I><B><I>we</I></B><I>&#148; as used in
this document refer to Consumers Energy Company and its subsidiaries and predecessors as a combined
entity, except where it is made clear that such term means only Consumers Energy Company. In this
document, &#147;</I><B><I>MW</I></B><I>&#148; means megawatts.</I>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Consumers Energy Company</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumers, a wholly-owned subsidiary of CMS Energy Corporation (&#147;<B>CMS Energy</B>&#148;), is a public
utility that provides electricity and natural gas to customers in Michigan&#146;s lower peninsula.
Consumers&#146; electric utility operations include the generation, purchase, distribution and sale of
electricity. As of December&nbsp;31, 2007, Consumers&#146; electric utility was authorized to provide
service in 61 of the 68 counties in Michigan&#146;s lower peninsula. In 2007, Consumers&#146; electric
utility owned and operated 32 electric generating plants with an aggregate of 5,673 MW of capacity.
Consumers&#146; gas utility operations purchase, transport, store, distribute and sell natural gas. As
of December&nbsp;31, 2007, Consumers&#146; gas utility was authorized to provide service in 46 of the 68
counties in Michigan&#146;s lower peninsula. In 2007, Consumers&#146; gas utility owned and operated 26,404
miles of distribution mains and 1,669 miles of transmission lines throughout Michigan&#146;s lower
peninsula. Consumers&#146; principal executive offices are located at One Energy Plaza, Jackson,
Michigan 49201, and Consumers&#146; telephone number is (517)&nbsp;788-0550.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Recent Developments</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>2007 Results of Operations</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>NET INCOME AVAILABLE TO COMMON STOCKHOLDER</B>

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000">In Millions</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Years Ended December 31,</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Change</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Electric</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">196</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">199</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(3</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Gas</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">87</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other (includes MCV Partnership interest)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(52</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">79</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net Income Available to Common Stockholder</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">310</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">184</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">126</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For 2007, our net income available to our common stockholder was $310&nbsp;million, compared to
$184&nbsp;million for 2006. In 2006, we sold our ownership interest in the Midland Cogeneration Venture
Limited Partnership (&#147;<B>MCV Partnership</B>&#148;). Accordingly, in 2007, we are no longer experiencing
mark-to-market losses on certain long-term gas contracts and associated financial hedges at the MCV
Partnership. The increase in 2007 also reflects higher net income from our gas utility due to
colder weather, and gas rate increases authorized in November&nbsp;2006 and August&nbsp;2007. Partially
offsetting these gains was a small decrease in electric net income, influenced by several factors,
including regulatory disallowances in 2007, higher property taxes and higher electric deliveries.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Specific changes to net income available to our common stockholder for 2007 versus 2006 are:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>In Millions</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#149;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">lower operating and maintenance costs primarily due to the sale of the Palisades nuclear
power plant in April&nbsp;2007;
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">$</TD>
    <TD align="right" valign="bottom">82</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#149;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">decrease in losses from our ownership interest in the MCV Partnership primarily due to the
absence, in 2007, of mark-to-market losses on certain long-term gas contracts and financial
hedges;
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="bottom">60</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#149;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">increase in gas delivery revenue primarily due to the Michigan Public Service Commission&#146;s
November&nbsp;2006 and August&nbsp;2007 gas rate orders;
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="bottom">47</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#149;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">decrease in other income tax adjustments primarily due to higher expected utilization of
capital loss carryforwards;
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="bottom">14</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#149;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">increase in electric revenue primarily due to favorable weather and higher surcharge revenue;
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="bottom">16</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#149;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">increase in gas delivery revenue primarily due to colder weather;
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="bottom">12</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#149;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">decrease due to electric revenue being used to offset costs incurred under our power
purchase agreement with Entergy Corporation;
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="bottom">(88</TD>
    <TD nowrap valign="bottom">)</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>

</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->S-4<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<P>
<DIV style="width: 100%; border: 1px solid black; padding: 11px;">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>In Millions</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#149;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">increase in general taxes, primarily due to higher property tax expense;
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="bottom">(14</TD>
    <TD nowrap valign="bottom">)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#149;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">increase in interest charges; and
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="bottom">(7</TD>
    <TD nowrap valign="bottom">)</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#149;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">other net increases to income.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="bottom">4</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD colspan="3" valign="top" align="left">Total change</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">126</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>






</DIV>





<P align="center" style="font-size: 10pt"><!-- Folio -->S-5<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<P>
<DIV style="width: 100%; border: 1px solid black; padding: 11px;">



<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>The Offering</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="67%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <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">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Issuer
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consumers Energy Company.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <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">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Securities Offered
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$250,000,000 aggregate principal
amount of 5.65% First
Mortgage Bonds due 2018 (the &#147;<B>Bonds</B>&#148;) to be
issued under the indenture dated as of September
1, 1945 between us and The Bank of New York
(ultimate successor to City Bank Farmers Trust
Company), as trustee (the &#147;<B>Trustee</B>&#148;), and as
amended and supplemented from time to time (the
&#147;<B>Indenture</B>&#148;).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <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">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Maturity
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Bonds mature on
September&nbsp;15, 2018.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <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">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Interest Rate
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Bonds will bear interest at 5.65% per annum.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <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">
    <TD nowrap valign="top"><DIV style="margin-left:0px; text-indent:-0px">Interest Payment Dates
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Semi-annually on March&nbsp;15 and
September&nbsp;15 of each year,
beginning September&nbsp;15, 2008, and at maturity.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <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">
    <TD nowrap valign="top"><DIV style="margin-left:0px; text-indent:-0px">Record Date for Interest Payments
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The first calendar day of the month in which an
interest payment date occurs.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <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">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Use of Proceeds
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">We expect to use the net proceeds from the sale
of the Bonds of $247,417,500, after deducting offering
discounts but before deducting offering
expenses, for general corporate purposes.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <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">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Ratings
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">BBB by Standard &#038; Poor&#146;s Ratings Group, a
division of The McGraw Hill Companies, Inc.
(&#147;<B>S&#038;P</B>&#148;), Baa1 by Moody&#146;s Investors Service, Inc.
(&#147;<B>Moody&#146;s</B>&#148;) and BBB&#043; by Fitch, Inc. (&#147;<B>Fitch</B>&#148;).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <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">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Ranking
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Bonds will rank equally in right of payment
with our other existing or future first mortgage
bonds issued either independently or as
collateral for outstanding or future securities
or loans.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <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">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Mandatory Redemption
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">None.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <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">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Optional Redemption
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Bonds will be redeemable at our option, in
whole or in part, at any time, on not less than
30&nbsp;days nor more than 60&nbsp;days notice at a price
equal to 100% of the principal amount of the
Bonds to be redeemed plus any accrued and unpaid
interest, and applicable premium owed, if any,
to the redemption date. See &#147;Description of the
Bonds &#151; Optional Redemption.&#148;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <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">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Form of Bonds
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">One or more global securities held in the name
of The Depository Trust Company (&#147;<B>DTC</B>&#148;) in a
minimum denomination of $1,000 and any integral
multiple thereof.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <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">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Settlement and Payment
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Same-day immediately available funds.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <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">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Trustee and Paying Agent
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Bank of New York.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <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">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Risk Factors
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">You should carefully consider each of the
factors referred to or as described in the
section of this prospectus supplement entitled
&#147;Risk Factors&#148; starting on page S-8, including
the &#147;Risk Factors&#148; section in our Annual Report
on Form&nbsp;10-K for the fiscal year ended December
31, 2007, before purchasing the Bonds.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->S-6<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<P>
<DIV style="width: 100%; border: 1px solid black; padding: 11px;">



<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Selected Consolidated Financial Data</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following selected consolidated financial data for the fiscal year ended December&nbsp;31, 2007
have been derived from our audited consolidated financial statements, which have been audited by
PricewaterhouseCoopers LLP, independent registered public accounting firm. The following selected
consolidated financial data for the fiscal years ended December&nbsp;31, 2003 through December&nbsp;31, 2006
have been derived from our audited consolidated financial statements, which have been audited by
Ernst &#038; Young LLP, independent registered public accounting firm, except for the amounts included
from the consolidated financial statements of the MCV Partnership. The MCV Partnership, a 49%
owned variable interest entity which we sold in November&nbsp;2006, was consolidated in our financial
statements beginning in 2004 through the date of sale and accounted for under the equity method of
accounting for the year ended December&nbsp;31, 2003 and was audited by PricewaterhouseCoopers LLP for
all periods through the date of sale. The financial information set forth below should be read in
conjunction with our consolidated financial statements, related notes and other financial
information also incorporated by reference in this prospectus supplement. See &#147;Where You Can Find
More Information.&#148; For selected balance sheet information, see &#147;Capitalization.&#148;
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="19" style="border-bottom: 1px solid #000000"><B>Year Ended December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2003</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="19"><B>(In millions)</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Income Statement Data:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating revenue</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,064</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,721</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,232</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,435</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings from equity method investees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income (loss)&nbsp;before cumulative effect of change in
accounting principle</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">312</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">186</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(96</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">280</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">196</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cumulative effect of change in accounting</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">312</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">186</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(96</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">279</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">196</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income (loss)&nbsp;available to common stockholder</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">310</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">184</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(98</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">277</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">194</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Balance Sheet Data (At Period End Date):</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total assets (a)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,401</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,845</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,178</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,811</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,745</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term debt, excluding current portion (a)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,692</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,303</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,583</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term debt&#151;related parties, excluding current portion</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">326</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">506</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-current portion of capital and finance lease obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">308</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">315</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">58</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total preferred stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Cash Flow or Other Data:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash provided by operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">442</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">473</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">639</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital expenditures, excluding capital lease additions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,258</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">646</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">572</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">508</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">486</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(a)</TD>
    <TD>&nbsp;</TD>
    <TD>Until their sale in November&nbsp;2006, we were the primary beneficiary of both the MCV
Partnership and the First Midland Limited Partnership. As a result, we consolidated their
assets, liabilities and activities into our consolidated financial statements as of and for
the years ended December&nbsp;31, 2005 and 2004. These partnerships had third party obligations
totaling $482&nbsp;million at December&nbsp;31, 2005 and $582&nbsp;million at December&nbsp;31, 2004. Property,
plant and equipment serving as collateral for these obligations had a carrying value of $224
million at December&nbsp;31, 2005 and $1.426&nbsp;billion at December&nbsp;31, 2004.</TD>
</TR>

</TABLE>


</DIV>




<P align="center" style="font-size: 10pt"><!-- Folio -->S-7<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="105"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RISK FACTORS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>An investment in the Bonds involves a significant degree of risk. You should carefully
consider the following risk factors, together with all of the other information included or
incorporated by reference in this prospectus supplement. In particular, you should carefully
consider the factors listed in &#147;Forward-Looking Statements and Information&#148; as well as the &#147;Risk
Factors&#148; contained in our Annual Report on </I><I>Form 10-K</I><I> for the fiscal year ended December&nbsp;31, 2007,
which is incorporated by reference into this prospectus supplement, before you decide to purchase
the Bonds. This document, this prospectus supplement and other written and oral statements that we
make contain forward-looking statements as defined by the Private Securities Litigation Reform Act
of 1995 and relevant legal decisions. Our intention with the use of such words as &#147;may&#148;, &#147;could&#148;,
&#147;anticipates&#148;, &#147;believes&#148;, &#147;estimates&#148;, &#147;expects&#148;, &#147;intends&#148;, &#147;plans&#148; and other similar words is to
identify forward-looking statements that involve risk and uncertainty. We designed the discussion
of potential risks and uncertainties in these documents and this prospectus supplement to highlight
important factors that may impact our business and financial outlook. We have no obligation to
update or revise any forward-looking statements regardless of whether new information, future
events or any other factors affect the information contained in the statements. The risks and
uncertainties described below and those incorporated from the referenced Annual Report on Form&nbsp;10-K
are not the only ones we may confront. Additional risks and uncertainties not currently known to
us or that we currently deem not material also may impair our business operations. If any of those
risks actually occur, our financial condition, operating results and prospects could be materially
adversely affected. This section contains forward-looking statements.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>We cannot assure you that an active trading market will develop for the Bonds.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Bonds will constitute a new class of securities with no established trading market. As we
do not intend to apply to list the Bonds for trading on any national securities exchange or to
include the Bonds in any automated quotation system, we cannot assure you that an active trading
market for the Bonds will develop or as to the liquidity or sustainability of any such market, the
ability of holders of the Bonds to sell their Bonds or the price at which holders of the Bonds will
be able to sell their Bonds. Future trading prices of the Bonds will also depend on many other
factors, including, among other things, prevailing interest rates, the market for similar
securities, the ratings of the Bonds from time to time, our performance and other factors.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-8<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="106"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>USE OF PROCEEDS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
expect to use the net proceeds from the sale of the Bonds of
$247,417,500, after deducting offering
discounts but before deducting offering expenses, for general corporate purposes.
</DIV>
<DIV align="left">
<A name="107"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RATIO OF EARNINGS TO FIXED CHARGES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The ratios of earnings to fixed charges for each of the years ended December&nbsp;31, 2003 through
2007 are as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="19" style="border-bottom: 0px solid #000000"><B>Year Ended December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2003</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ratio of earnings to fixed charges: (a)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.54</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD nowrap>(b)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.29</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(a)</TD>
    <TD>&nbsp;</TD>
    <TD>For purposes of computing the ratio, earnings represent the sum of pretax income, net
interest charges and the estimated interest portions of lease rentals, plus distributed income
of equity investees less earnings from equity investees.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(b)</TD>
    <TD>&nbsp;</TD>
    <TD>For the year ended December&nbsp;31, 2005, fixed charges exceeded earnings by $591&nbsp;million.
Earnings as defined include asset impairment charges of $1.184&nbsp;billion.</TD>
</TR>

</TABLE>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="18" style="border-bottom: 0px solid #000000"><B>Year Ended December 31,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2005(b)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2003</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="18"><B>(In millions)</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings as defined: (a)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pretax income from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">437</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">167</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(590</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">439</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">333</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Exclude equity basis subsidiaries</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(42</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Include equity basis dividends received</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fixed charges as defined</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">293</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">307</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">316</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">345</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">261</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Earnings as defined</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">730</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">473</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(275</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">783</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">597</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fixed charges as defined: (a)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest on long-term debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">236</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">286</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">305</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">328</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">241</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Estimated interest portion of lease rental</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other interest charges</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Fixed charges as defined</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">293</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">307</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">316</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">345</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">261</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(a)</TD>
    <TD>&nbsp;</TD>
    <TD>Earnings and fixed charges as defined in instructions for Item&nbsp;503 of Regulation&nbsp;S-K.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(b)</TD>
    <TD>&nbsp;</TD>
    <TD>For the year ended December&nbsp;31, 2005, fixed charges exceeded earnings by $591&nbsp;million.
Earnings as defined include asset impairment charges of $1.184&nbsp;billion.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->S-9<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
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<DIV style="font-family: 'Times New Roman',Times,serif">





<DIV align="left">
<A name="108"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CAPITALIZATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth our capitalization as of December&nbsp;31, 2007 on an actual basis
and as adjusted to reflect the sale of $250,000,000 of Bonds in this offering and the application of the net
proceeds as described under &#147;Use of Proceeds.&#148; This table should be read in conjunction with our
consolidated financial statements and related notes and other financial information also
incorporated by reference in this prospectus supplement. See &#147;Where You Can Find More
Information.&#148;
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>At December 31, 2007</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Actual</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>As Adjusted</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 0px solid #000000"><B>(Unaudited)</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>(In millions)</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Common stockholder&#146;s equity </DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,647</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,647</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Preferred stock </DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term debt:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">5.65% First
Mortgage Bonds due 2018 (a) </DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">250</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other long-term debt (excluding current maturities)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,692</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,692</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-current portion of capital and finance lease obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">225</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total capitalization </DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7,608</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7,858</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current portion of long-term debt, capital and finance lease
obligations </DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">470</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">470</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total capitalization and current portion of long-term
debt, capital and finance lease obligations </DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8,078</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8,328</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(a)</TD>
    <TD>&nbsp;</TD>
    <TD>We expect to use the net proceeds from the sale of the Bonds
of $247,417,500, after deducting offering
discounts but before deducting offering expenses, for general corporate purposes. See &#147;Use of
Proceeds.&#148;</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->S-10<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">





<DIV align="left">
<A name="109"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DESCRIPTION OF THE BONDS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>General</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Bonds are to be issued under an Indenture dated as of September&nbsp;1, 1945, between Consumers
and The Bank of New York (ultimate successor to City Bank Farmers Trust Company), as trustee, as
amended and supplemented by various supplemental indentures and as supplemented by the 108th
Supplemental Indenture dated as of March&nbsp;14, 2008 providing for the Bonds. In connection with the
change of the state of incorporation from Maine to Michigan in 1968, Consumers succeeded to, and
was substituted for, the Maine corporation under the Indenture. At February&nbsp;29, 2008, 13 series of
first mortgage bonds in an aggregate principal amount of approximately $3.169&nbsp;billion were
outstanding under the Indenture, excluding three series of first mortgage bonds in an approximate
aggregate principal amount of $880&nbsp;million to secure outstanding senior notes and credit facilities
and four series of first mortgage bonds in an approximate aggregate principal amount of $161
million to secure outstanding pollution control and solid waste revenue bonds.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The statements herein concerning the Bonds and the Indenture are a summary and do not purport
to be complete and are subject to, and qualified in their entirety by, all of the provisions of the
Indenture, which is incorporated herein by this reference. They make use of defined terms and are
qualified in their entirety by express reference to the Indenture, including the 108th Supplemental
Indenture, a copy of which will be made available upon request to the Trustee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Principal, Maturity and Interest</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Bonds are initially being offered in the aggregate principal amount
of $250,000,000. The Indenture
permits us to &#147;re-open&#148; this issuance of Bonds without the consent of the holders of the Bonds.
Accordingly, the principal amount of the Bonds may be increased in the future on the same terms and
conditions and with the same CUSIP numbers as the Bonds being offered by this prospectus
supplement. The Bonds will mature on September&nbsp;15, 2018 unless earlier redeemed or otherwise repaid.
The Bonds will bear interest at a rate of 5.65% per year, payable
semi-annually in arrears on March&nbsp;15
and September&nbsp;15 of each year and at the date of maturity. Interest will be paid to the person in whose
name the Bonds are registered at the close of business on the first calendar day of the month in
which the interest payment date occurs. The initial interest payment date for the Bonds will be
September&nbsp;15, 2008. Interest payable on any interest payment date or on the date of maturity will be the
amount of interest accrued from and including the date of original issuance or from and including
the most recent interest payment date on which interest has been paid or duly made available for
payment to but excluding such interest payment date or the date of maturity, as the case may be.
So long as the Bonds are in book-entry form, principal of and interest on the Bonds will be
payable, and the Bonds may be transferred, only through the facilities of DTC. If any interest
payment date falls on a day that is not a business day, the interest payment date will be the next
succeeding business day (and without any interest or other payment in respect of any such delay).
Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Registration, Transfer and Exchange</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Bonds will be initially issued in the form of one or more bonds, in registered form,
without coupons (&#147;<B>Global Bonds</B>&#148;), in denominations of $1,000 and any integral multiple thereof as
described under &#147;Book-Entry Only Issuance &#151; The Depository Trust Company.&#148; The Global Bonds will
be registered in the name of the nominee of DTC. Except as described under &#147;Book-Entry Only
Issuance &#151; The Depository Trust Company,&#148; owners of beneficial interests in a Global Bond will not
be entitled to have Bonds registered in their names, will not receive or be entitled to receive
physical delivery of any such Bond and will not be considered the registered holder thereof under
the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Optional Redemption</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Bonds will be redeemable at our option, in whole or in part, at any time or from time to
time, at a redemption price equal to 100% of the principal amount of such Bonds being redeemed plus
the Applicable Premium (as defined below), if any, thereon at the time of redemption, together with
accrued interest, if any, thereon to the redemption date. In no event will the redemption price be
less than 100% of the principal amount of the Bonds plus accrued interest, if any, thereon to the
redemption date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following definitions are used to determine the Applicable Premium:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Applicable Premium&#148; </I>means, with respect to a Bond (or portion thereof) being redeemed at any
time, the excess of (A)&nbsp;the present value at such time of the principal amount of such Bond (or
portion thereof) being redeemed plus all scheduled interest payments on such Bond (or portion
thereof) after the redemption date, which present value shall be computed using a discount rate
equal to the Treasury Rate (as defined below) plus 45&nbsp;basis points, over (B)&nbsp;the principal
amount of such Bond (or portion thereof)
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-11<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">being redeemed at such time. For purposes of this definition, the present values of interest
and principal payments will be determined in accordance with generally accepted principles of
financial analysis.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Treasury Rate&#148; </I>means the yield to maturity at the time of computation of United States
Treasury securities adjusted to constant maturity under the caption &#147;Treasury constant maturities,
Nominal&#148; (as compiled and published in the most recent Federal Reserve Statistical Release
H.15(519) (the &#147;<B>Statistical Release</B>&#148;)) which has become publicly available at least two business
days prior to the redemption date (or, if such Statistical Release is no longer published, any
publicly available source of similar market data) most nearly equal to the then remaining average
life to stated maturity of the Bonds; provided, however, that if the average life (rounded to the
first decimal point) to stated maturity of the Bonds is not equal to the constant maturity of a
United States Treasury security for which a weekly average yield (in the Statistical Release
columns labeled &#147;Week Ending&#148;) is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of
United States Treasury securities for which such yields are given.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Treasury Rate will be calculated on the third business day preceding the date fixed for
redemption.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the original redemption date is on or after a record date and on or before the relevant
interest payment date, the accrued and unpaid interest, if any, will be paid to the person or
entity in whose name the Bond is registered at the close of business on the record date, and no
additional interest will be payable to the holders whose Bonds shall be subject to redemption.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If less than all of the Bonds are to be redeemed, the Trustee shall select, in such manner as
it shall deem appropriate and fair, the particular Bonds or portions thereof to be redeemed.
Notice of redemption shall be given by mail not less than 30 nor more than 60&nbsp;days prior to the
date fixed for redemption to the holders of the Bonds to be redeemed (which, as long as the Bonds
are held in the book-entry system, will be DTC (or its nominee) or a successor depositary);
provided, however, that the failure to duly give such notice by mail, or any defect therein, shall
not affect the validity of any proceedings for the redemption of the Bonds as to which there shall
have been no such failure or defect. On and after the date fixed for redemption (unless we shall
default in the payment of the Bonds or portions thereof to be redeemed at the applicable redemption
price, together with accrued interest, if any, thereon to such date), interest on the Bonds or the
portions thereof so called for redemption shall cease to accrue.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Sinking Fund Requirement</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Bonds will not have the benefit of any sinking fund.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Issuance of Additional First Mortgage Bonds</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional first mortgage bonds may be issued under the Indenture up to 60% of unfunded net
property additions or against the deposit of an equal amount of cash, if, for any period of twelve
consecutive months within the fifteen preceding calendar months, the net earnings of Consumers
(before income or excess profit taxes) shall have been at least twice the interest requirement for
one year on all first mortgage bonds outstanding and to be issued and on indebtedness of prior or
equal rank. Additional first mortgage bonds may also be issued to refund first mortgage bonds
outstanding under the Indenture. Deposited cash may be applied to the retirement of first mortgage
bonds or be withdrawn in an amount equal to the principal amount of first mortgage bonds which may
be issued on the basis of unfunded net property additions. Such future issuances are also subject
to certain other requirements set forth in the Indenture. As of January&nbsp;31, 2008, unfunded net
property additions were $3.107&nbsp;billion, and Consumers could issue $1.864&nbsp;billion of additional
first mortgage bonds on the basis of such property additions. In addition, as of February&nbsp;29,
2008, Consumers could issue $313&nbsp;million of additional first mortgage bonds on the basis of first
mortgage bonds previously retired.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Bonds are to be issued upon the basis of retired bonds.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Limitations on Dividends</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 108th Supplemental Indenture does not restrict Consumers&#146; ability to pay dividends on its
common stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Concerning the Trustee</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Bank of New York is the Trustee and paying agent under the Indenture. Consumers and its
affiliates maintain depository and other normal banking relationships with The Bank of New York.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-12<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Indenture provides that Consumers&#146; obligations to compensate the Trustee and reimburse the
Trustee for expenses, disbursements and advances will constitute indebtedness which will be secured
by a lien generally prior to that of the first mortgage bonds upon all property and funds held or
collected by the Trustee as such.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trustee or the holders of 20% in total principal amount of the first mortgage bonds may
declare the principal due on default, but the holders of a majority in total principal amount may
rescind such declaration and waive the default if the default has been cured. Subject to certain
limitations, the holders of a majority in total principal amount of the first mortgage bonds may
generally direct the time, method and place of conducting any proceeding for the enforcement of the
Indenture. No first mortgage bondholder has the right to institute any proceedings for the
enforcement of the Indenture unless that holder has given the Trustee written notice of a default,
the holders of 20% of total principal amount of outstanding first mortgage bonds shall have
tendered to the Trustee reasonable security or indemnity against costs, expenses and liabilities
and requested the Trustee to take action, the Trustee shall have declined to take action or failed
to do so within 60&nbsp;days and no inconsistent directions shall have been given by the holders of a
majority in total principal amount of the first mortgage bonds.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Priority and Security</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Bonds are ranked equally with all other series of first mortgage bonds now outstanding or
issued later under the Indenture. The Indenture is a direct first lien on substantially all of
Consumers&#146; property and franchises (other than certain property expressly excluded from the lien
(such as cash, bonds, stock and certain other securities, contracts, accounts and bills
receivables, judgments and other evidences of indebtedness, stock in trade, materials or supplies
manufactured or acquired for the purpose of sale and/or resale in the usual course of business or
consumable in the operation of any of the properties of Consumers, natural gas, oil and minerals,
motor vehicles and certain real property listed in Schedule&nbsp;A to the Indenture)). This lien is
subject to excepted encumbrances (and certain other limitations) as defined and described in the
Indenture. The Bonds are also subject to certain provisions of Michigan law which provide that,
under certain circumstances, the State of Michigan&#146;s lien against property on which it has incurred
costs related to any environmental response activity that is subordinate to prior recorded liens
can become superior to such prior liens pursuant to court order. The Indenture permits, with
certain limitations, the acquisition of property subject to prior liens and, under certain
conditions, permits the issuance of additional indebtedness under such prior liens to the extent of
60% of net property additions made by Consumers to the property subject to such prior liens.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Release and Substitution of Property</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Indenture provides that, subject to various limitations, property may be released from the
lien thereof when sold or exchanged, or contracted to be sold or exchanged, upon the basis of:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>cash deposited with the Trustee;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>bonds or purchase money obligations delivered to the Trustee;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>prior lien bonds delivered to the Trustee or reduced or assumed by the purchaser;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>property additions acquired in exchange for the property released; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>upon a showing that unfunded net property additions exist.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Indenture also permits the withdrawal of cash upon a showing that unfunded net property
additions exist or against the deposit of bonds or the application thereof to the retirement of
bonds.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Modification of Indenture</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Indenture, the rights and obligations of Consumers and the rights of the holders of first
mortgage bonds may be modified by Consumers with the consent of the holders of 75% in principal
amount of the first mortgage bonds and of not less than 60% of the principal amount of each series
affected. In general, however, no modification of the terms of payment of principal or interest
and no modification affecting the lien or reducing the percentage required for modification is
effective against any first mortgage bonds without the first mortgage bondholders&#146; consent.
Consumers has reserved the right without any consent or other action by the holders of first
mortgage bonds of any series created after September&nbsp;15, 1993 or by the holder of any senior note
or exchange note that is secured by first mortgage bonds to amend the Indenture in order to
substitute a majority in principal amount of first mortgage bonds
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-13<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">outstanding under the Indenture for the 75% requirement set forth above (and then only in
respect of such series of outstanding bonds as shall be affected by the proposed action) and to
eliminate the requirement for a series-by-series consent requirement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Defaults</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Indenture defines the following as &#147;defaults&#148;:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>failure to pay principal when due;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>failure to pay interest for 60&nbsp;days;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>failure to pay any installment of any sinking or other purchase fund for 90&nbsp;days;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>certain events in bankruptcy, insolvency or reorganization; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>failure to perform any other covenant for 90&nbsp;days following written demand by the Trustee
for Consumers to cure such failure.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumers has covenanted to pay interest on any overdue principal and (to the extent permitted
by law) on overdue installments of interest, if any, on the first mortgage bonds under the
Indenture at the rate of 6% per year. The Indenture does not contain a provision requiring any
periodic evidence to be furnished as to the absence of default or as to compliance with the terms
thereof. However, Consumers is required by law to furnish annually to the Trustee a certificate as
to compliance with all conditions and covenants under the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Book-Entry Only Issuance &#151; The Depository Trust Company</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Bonds initially will be in the form of one or more Global Bonds. Upon issuance, the
Global Bonds will be deposited with the Trustee, as custodian for DTC, and registered in the name
of DTC or its nominee, in each case for credit to the accounts of DTC&#146;s Direct Participants and
Indirect Participants (each as defined below).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transfer of beneficial interests in any Global Bonds will be subject to the applicable rules
and procedures of DTC and its Direct Participants or Indirect Participants, which may change from
time to time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Global Bonds may be transferred, in whole and not in part, only to another nominee of DTC
or to a successor of DTC or its nominee in certain limited circumstances. Beneficial interests in
the Global Bonds may be exchanged for bonds in certificated form (&#147;<B>Certificated Bonds</B>&#148;) in certain
limited circumstances. See &#147;&#151; Exchange of Interests in Global Bonds for Certificated Bonds.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Depositary Procedures</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DTC has advised Consumers that DTC is a limited-purpose trust company created to hold
securities for its participating organizations (collectively, the &#147;<B>Direct Participants</B>&#148;) and to
facilitate the clearance and settlement of transactions in those securities between Direct
Participants through electronic book-entry changes in accounts of Direct Participants. The Direct
Participants include securities brokers and dealers (including the underwriters), banks, trust
companies, clearing corporations and certain other organizations. Access to DTC&#146;s system is also
available to other entities that clear through or maintain a direct or indirect, custodial
relationship with a Direct Participant (collectively, the &#147;<B>Indirect Participants</B>&#148;). DTC may hold
securities beneficially owned by other persons only through the Direct Participants or Indirect
Participants, and such other persons&#146; ownership interest and transfer of ownership interest will be
recorded only on the records of the appropriate Direct Participant and/or Indirect Participant, and
not on the records maintained by DTC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DTC has also advised Consumers that, pursuant to DTC&#146;s procedures, (1)&nbsp;upon deposit of the
Global Bonds, DTC will credit the accounts of the Direct Participants designated by the
underwriters with portions of the principal amount of the Global Bonds allocated by the
underwriters to such Direct Participants and (2)&nbsp;DTC will maintain records of the ownership
interests of such Direct Participants in the Global Bonds and the transfer of ownership interests
by and between Direct Participants. DTC will not maintain records of the ownership interests of,
or the transfer of ownership interests by and between, Indirect Participants or other owners of
beneficial interests in the Global Bonds. Direct Participants and Indirect Participants must
maintain their own records of the ownership interests of, and the transfer of ownership interests
by and between, Indirect Participants and other owners of beneficial
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-14<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">interests in the Global Bonds. Investors in the Global Bonds may hold their interests therein
directly through DTC if they are Direct Participants in DTC or indirectly through organizations
that are Direct Participants in DTC. All ownership interests in any Global Bonds will be subject
to the procedures and requirements of DTC.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The laws of some states require that certain persons take physical delivery in definitive,
certificated form of securities that they own. This may limit or curtail the ability to transfer
beneficial interests in a Global Bond to such persons. Because DTC can act only on behalf of
Direct Participants, which in turn act on behalf of Indirect Participants and others, the ability
of a person having a beneficial interest in a Global Bond to pledge such interest to persons or
entities that are not Direct Participants in DTC, or to otherwise take actions in respect of such
interests, may be affected by the lack of physical certificates evidencing such interests. For
certain other restrictions on the transferability of the Bonds, see &#147;&#151; Exchange of Interests in
Global Bonds for Certificated Bonds.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Except as described in &#147;&#151; Exchange of Interests in Global Bonds for Certificated Bonds&#148;,
owners of beneficial interests in the Global Bonds will not have Bonds registered in their names,
will not receive physical delivery of Certificated Bonds in certificated form and will not be
considered the registered owners or holders thereof under the Indenture for any purpose.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the terms of the Indenture, Consumers and the Trustee will treat the persons in whose
names the Bonds are registered (including Bonds represented by Global Bonds) as the owners thereof
for the purpose of receiving payments and for any and all other purposes whatsoever. Payments in
respect of the principal, premium, liquidated damages, if any, and interest on Global Bonds
registered in the name of DTC or its nominee will be payable by the Trustee to DTC or its nominee
as the registered holder under the Indenture. Consequently, neither Consumers, the Trustee nor any
agent of Consumers or the Trustee has or will have any responsibility or liability for (1)&nbsp;any
aspect of DTC&#146;s records or any Direct Participant&#146;s or Indirect Participant&#146;s records relating to
or payments made on account of beneficial ownership interests in the Global Bonds or for
maintaining, supervising or reviewing any of DTC&#146;s records or any Direct Participant&#146;s or Indirect
Participant&#146;s records relating to the beneficial ownership interests in any Global Bond or (2)&nbsp;any
other matter relating to the actions and practices of DTC or any of its Direct Participants or
Indirect Participants.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DTC has advised Consumers that its current payment practice (for payments of principal,
interest and the like) with respect to securities such as the Bonds is to credit the accounts of
the relevant Direct Participants with such payment on the payment date in amounts proportionate to
such Direct Participant&#146;s respective ownership interests in the applicable Global Bonds as shown on
DTC&#146;s records. Payments by Direct Participants and Indirect Participants to the beneficial owners
of the Bonds will be governed by standing instructions and customary practices between them and
will not be the responsibility of DTC, the Trustee or Consumers. Neither Consumers nor the Trustee
will be liable for any delay by DTC or its Direct Participants or Indirect Participants in
identifying the beneficial owners of the Bonds, and Consumers and the Trustee may conclusively rely
on and will be protected in relying on instructions from DTC or its nominee as the registered owner
of the Bonds for all purposes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Global Bonds will trade in DTC&#146;s Same-Day Funds Settlement System and, therefore,
transfers between Direct Participants in DTC will be effected in accordance with DTC&#146;s procedures,
and will be settled in immediately available funds. Transfers between Indirect Participants who
hold an interest through a Direct Participant will be effected in accordance with the procedures of
such Direct Participant but generally will settle in immediately available funds.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DTC has advised Consumers that it will take any action permitted to be taken by a holder of
Bonds of a series only at the direction of one or more Direct Participants to whose account
interests in the related Global Bonds are credited and only in respect of such portion of the
aggregate principal amount of such Bonds as to which such Direct Participant or Direct Participants
has or have given direction. However, if there is an event of default with respect to the Bonds,
DTC reserves the right to exchange the related Global Bonds (without the direction of one or more
of its Direct Participants) for legended Certificated Bonds, and to distribute such Certificated
Bonds to its Direct Participants. See &#147;&#151; Exchange of Interests in Global Bonds for Certificated
Bonds.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although DTC has agreed to the foregoing procedures to facilitate transfers of interests in
the Global Bonds among Direct Participants, it is under no obligation to perform or to continue to
perform such procedures, and such procedures may be discontinued at any time. None of Consumers,
the underwriters or the Trustee will have any responsibility for the performance by DTC, or its
respective Direct Participants and Indirect Participants, of their respective obligations under the
rules and procedures governing any of their operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information in this section concerning DTC and its book-entry system has been obtained
from DTC, and Consumers takes no responsibility for the accuracy thereof.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-15<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Exchange of Interests in Global Bonds for Certificated Bonds</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Global Bonds may be exchanged for Certificated Bonds if (1) (a)&nbsp;DTC notifies Consumers that it
is unwilling or unable to continue as depositary for the Global Bonds or Consumers determines that
DTC is unable to act as such depositary and Consumers thereupon fails to appoint a successor
depositary within 90&nbsp;days or (b)&nbsp;DTC has ceased to be a clearing agency registered under the
Exchange Act, (2)&nbsp;Consumers, at its option, notifies the Trustee in writing that it elects to cause
the issuance of Certificated Bonds or (3)&nbsp;there shall have occurred and be continuing a default or
an event of default with respect to the Bonds. In any such case, Consumers will notify the Trustee
in writing that, upon surrender by the Direct Participants and Indirect Participants of their
interest in such Global Bond, Certificated Bonds will be issued to each person that such Direct
Participants and Indirect Participants and DTC identify as being the beneficial owner of the
related Bonds.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beneficial interests in Global Bonds held by any Direct Participant or Indirect Participant
may be exchanged for Certificated Bonds upon request to DTC, or by such Direct Participant (for
itself or on behalf of an Indirect Participant), to the Trustee in accordance with customary DTC
procedures. Certificated Bonds delivered in exchange for any beneficial interest in any Global
Bond will be registered in the names, and issued in any approved denominations, requested by DTC on
behalf of such Direct Participants or Indirect Participants (in accordance with DTC&#146;s customary
procedures).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither Consumers nor the Trustee will be liable for any delay by the holder of Global Bonds
or DTC in identifying the beneficial owners of the related Bonds, and Consumers and the Trustee may
conclusively rely on, and will be protected in relying on, instructions from the holder of the
Global Bond or DTC for all purposes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Certificated Bonds</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certificated Bonds may be exchangeable for other Certificated Bonds of any authorized
denominations and of a like aggregate principal amount and tenor. Certificated Bonds may be
presented for exchange, and may be presented for registration of transfer (duly endorsed, or
accompanied by a duly executed written instrument of transfer), at the designated office of the
Trustee in Detroit, Michigan (the &#147;<B>Security Registrar</B>&#148;). The Security Registrar will not charge a
service charge for any registration of transfer or exchange of Bonds; however, Consumers may
require payment by a holder of a sum sufficient to cover any tax, assessment or other governmental
charge payable in connection therewith, as described in the Indenture. Such transfer or exchange
will be effected upon the Security Registrar being satisfied with the documents of title and
identity of the person making the request. Consumers may at any time designate additional transfer
agents with respect to the Bonds.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumers shall not be required to (a)&nbsp;issue, exchange or register the transfer of any
Certificated Bond for a period of 15&nbsp;days next preceding the mailing of notice of redemption of
such Bond or (b)&nbsp;exchange or register the transfer of any Certificated Bond or portion thereof
selected, called or being called for redemption, except, in the case of any Certificated Bond to be
redeemed in part, the portion thereof not so to be redeemed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a Certificated Bond is mutilated, destroyed, lost or stolen, it may be replaced at the
office of the Security Registrar upon payment by the holder of such expenses as may be incurred by
Consumers and the Security Registrar in connection therewith and the furnishing of such evidence
and indemnity as Consumers and the Security Registrar may require. Mutilated Bonds must be
surrendered before new Bonds will be issued.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Same Day Settlement</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments in respect of the Bonds represented by the Global Bonds (including principal,
premium, if any, and interest) will be made by wire transfer of immediately available same day
funds to the accounts specified by DTC as the holder of the Global Bonds. Principal, premium, if
any, and interest and liquidated damages, if any, on all Certificated Bonds in registered form will
be payable at the office or agency of the Trustee in The City of New York, except that, at the
option of Consumers, payment of any interest and liquidated damages, if any, may be made except for
DTC (1)&nbsp;by check mailed to the address of the person entitled thereto as such address shall appear
in the security register or (2)&nbsp;by wire transfer to an account maintained by the person entitled
thereto as specified in the security register.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-16<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="110"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RATINGS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;S&#038;P has assigned the Bonds a rating of BBB, Moody&#146;s has assigned the Bonds a rating of Baa1
and Fitch has assigned the Bonds a rating of BBB&#043;. Such ratings reflect only the views of such
ratings agencies, and do not constitute a recommendation to buy, sell or hold securities. In
general, ratings address credit risk. Each rating should be evaluated independently of any other
rating. An explanation of the significance of such ratings may be obtained only from such rating
agencies at the following addresses: Standard &#038; Poor&#146;s, 25 Broadway, New York, New York 10004;
Moody&#146;s Investors Service, Inc., 99 Church Street, New York, New York 10007; and Fitch, Inc., 1
State Street Plaza, New York, New York 10004. The security rating may be subject to revision or
withdrawal at any time by the assigning rating organization, and, accordingly, there can be no
assurance that such ratings will remain in effect for any period of time or that they will not be
revised downward or withdrawn entirely by the rating agencies if, in their judgment, circumstances
warrant. Neither Consumers nor the underwriters have undertaken any responsibility to oppose any
proposed downward revision or withdrawal of a rating on the Bonds. Any such downward revision or
withdrawal of such ratings may have an adverse effect on the market price of the Bonds.
</DIV>
<DIV align="left">
<A name="111"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>UNDERWRITING</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Barclays Capital Inc., BNP Paribas Securities Corp. and Scotia Capital (USA)&nbsp;Inc. are acting
as joint book-running managers of the offering and acting as representatives of the underwriters
named below. Subject to the terms and conditions stated in the underwriting agreement dated the
date of this prospectus supplement, each underwriter named below has agreed to purchase, and we
have agreed to sell to that underwriter, the principal amount of the Bonds set forth opposite the
underwriter&#146;s name.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Underwriters</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Principal Amount</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Barclays Capital Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$62,500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">BNP Paribas Securities Corp.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">62,500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Scotia Capital (USA)&nbsp;Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">62,500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Greenwich Capital Markets, Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,125,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Wedbush Morgan Securities Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,125,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Comerica Securities, Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,750,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Wells Fargo Securities, LLC </DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,750,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">The Williams Capital Group, L.P.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,750,000</TD>
    <TD align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total </DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$250,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The underwriting agreement provides that the obligations of the underwriters to purchase the
Bonds are subject to approval of legal matters by counsel and to other conditions. The
underwriters are obligated to purchase and accept delivery of all Bonds if any are purchased.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The underwriters propose to offer some of the Bonds directly to the public at the public
offering price set forth on the cover page of this prospectus supplement and some of the Bonds to
dealers at the public offering price less a concession not to exceed
0.40% of the principal amount
of the Bonds. The underwriters may allow, and dealers may reallow, a concession not to exceed 0.25% of the principal amount of the Bonds on sales to other dealers. After the initial offering of
the Bonds to the public, the representatives may change the public offering price and concessions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We estimate that our out-of-pocket expenses for this offering will be approximately $300,000.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The underwriters have advised us that they currently intend to make a market in the Bonds.
However, they are not obligated to do so and they may discontinue any market-making activities with
respect to the Bonds at any time without notice. In addition, marketing-making activity will be
subject to the limits imposed by the Securities Act of 1933, as amended (the &#147;<B>Securities Act</B>&#148;), and
the Exchange Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with this offering, the underwriters may purchase and sell Bonds in the open
market. These transactions may include over-allotment, syndicate covering transactions and
stabilizing transactions. Over-allotment involves sales of Bonds in excess of the principal amount
of Bonds to be purchased by the underwriters in this offering, which creates a short position for
the underwriters. Covering transactions involve purchases of the Bonds in the open market after
the distribution has been completed in order to cover short positions. Stabilizing transactions
consist of certain bids or purchases of Bonds made for the purpose of preventing or retarding a
decline in the market price of the Bonds while the offering is in progress. Any of these
activities may have the effect of preventing or retarding a decline in the market price of the
Bonds. They may also cause the price of the Bonds to be higher than the price that otherwise would
exist in the open market in the absence of these transactions. The underwriters may
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-17<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">conduct these transactions in the over-the-counter market or otherwise. If the underwriters
commence any of these transactions, they may discontinue them at any time.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We expect to deliver the Bonds against payment for the Bonds on or about the date specified in
the last paragraph of the cover page of this prospectus supplement, which will be the fourth
business day following the date of pricing of the Bonds. Since trades in the secondary market
generally settle in three business days, purchasers who wish to trade Bonds on the date of pricing
will be required, by virtue of the fact that the Bonds initially will settle in T&#043;4, to specify
alternative settlement arrangements to prevent a failed settlement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The underwriters have performed investment banking and advisory services for us and our
affiliates from time to time for which they have received customary fees and expenses. Affiliates
of some of the underwriters are lenders to us and our affiliates under our credit facilities. Some
of the underwriters and their affiliates may engage in other transactions with, and perform other
services for, us and our affiliates in the ordinary course of business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A prospectus in electronic format may be made available on the websites maintained by one or
more of the underwriters.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have agreed to indemnify the underwriters against certain liabilities, including
liabilities under the Securities Act, or to contribute to payments that the underwriters may be
required to make because of any of those liabilities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;UnionBanc Investment Services, LLC, a member of the National Association of Securities
Dealers, Inc. and subsidiary of Union Bank of California, N.A., is being paid a referral fee by
Wedbush Morgan Securities Inc.
</DIV>
<DIV align="left">
<A name="112"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>LEGAL OPINIONS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shelley J. Ruckman, Esq., Assistant General Counsel of Consumers, will render opinions as to
the legality of the Bonds for Consumers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pillsbury Winthrop Shaw Pittman LLP will pass upon certain legal matters with respect to the
Bonds for the underwriters.
</DIV>
<DIV align="left">
<A name="113"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXPERTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The consolidated financial statements of Consumers as of and for the year ended December&nbsp;31,
2007 and management&#146;s assessment of the effectiveness of internal control over financial reporting
(which is included in Management&#146;s Report on Internal Control over Financial Reporting),
incorporated in this prospectus supplement by reference to the Annual Report on Form 10-K for the
year ended December&nbsp;31, 2007, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the
authority of said firm as experts in auditing and accounting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The consolidated financial statements of Consumers at December&nbsp;31, 2006 and for each of the
two years in the period ended December&nbsp;31, 2006, appearing in Consumers&#146; Annual Report on Form 10-K
for the year ended December&nbsp;31, 2007 (including a schedule appearing therein), have been audited by
Ernst &#038; Young LLP, independent registered public accounting firm, as set forth in their report
thereon included therein and incorporated herein by reference which, as to 2006 and 2005, are based
in part on the report of PricewaterhouseCoopers LLP, independent registered public accounting firm
for the MCV Partnership. Such consolidated financial statements are incorporated herein by
reference in reliance upon such reports<SUP style="font-size: 85%; vertical-align: text-top"> </SUP>given on the authority of such firms as experts
in accounting and auditing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The financial statements of the MCV Partnership, as of November&nbsp;21, 2006 and December&nbsp;31, 2005
and for the period ended November&nbsp;21, 2006 and the year ended December&nbsp;31, 2005, not separately
presented in this prospectus supplement, have been audited by PricewaterhouseCoopers LLP, an
independent registered public accounting firm, whose report thereon is incorporated in this
prospectus supplement by reference to the Annual Report on Form 10-K for the year ended December
31, 2007. Such financial statements, to the extent they have been included in the financial
statements of Consumers, have been so incorporated in reliance on the report of such independent
registered public accounting firm given on the authority of said firm as experts in auditing and
accounting.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-18<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><FONT style="font-size:14pt"><B>Consumers Energy Company</B></FONT><BR>
SENIOR NOTES<BR>
FIRST MORTGAGE BONDS<BR>
SUBORDINATED DEBENTURES<BR>
GUARANTEES
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">AND

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><FONT style="font-size:14pt"><B>Consumers Energy Company Financing V</B></FONT><BR>
<FONT style="font-size:14pt"><B>Consumers Energy Company Financing VI</B></FONT><BR>
TRUST PREFERRED SECURITIES<BR>
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY<BR>
CONSUMERS ENERGY COMPANY

</DIV>

<DIV align="Center" style="font-size: 14pt; margin-top: 6pt"><B>Offering Price: $1,500,000,000</B>

</DIV>

<DIV align="Center" style="font-size: 12pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may offer, from time to time:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>secured senior debt, unsecured senior debt or unsecured subordinated debt securities
consisting of debentures, notes, bonds and other unsecured evidences of indebtedness; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>guarantees of Consumers Energy Company with respect to trust preferred securities of
Consumers Energy Company Financing V and Consumers Energy Company Financing VI.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For each type of securities listed above, the amount, price and terms will be determined at or
prior to the time of sale.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumers Energy Company Financing V and Consumers Energy Company Financing VI, which are
Delaware business trusts (the &#147;trusts&#148;), may offer trust preferred securities. The trust preferred
securities represent preferred undivided beneficial interests in the assets of Consumers Energy
Company Financing V and Consumers Energy Company Financing VI in amounts, at prices and on terms to
be determined at or prior to the time of sale.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will provide the specific terms of these securities in an accompanying prospectus
supplement or supplements. You should read this prospectus and the accompanying prospectus
supplement or supplements carefully before you invest.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>These securities involve risk. See &#147;Risk Factors&#148; on page 2.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal offense.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to sell these securities through underwriters, dealers, agents or directly to a
limited number of purchasers. The names of, and any securities to be purchased by or through,
these parties, the compensation of these parties and other special terms in connection with the
offering and sale of these securities will be provided in the related prospectus supplement or
supplements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus may not be used to consummate sales of any of these securities unless
accompanied by a prospectus supplement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information in this prospectus is not complete and may be changed. We may not sell these
securities until the registration statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not permitted.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">The date of this prospectus is December&nbsp;1, 2004.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NO PERSON IS AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR
TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY
PROSPECTUS SUPPLEMENT, AND ANY INFORMATION OR REPRESENTATION NOT CONTAINED OR INCORPORATED HEREIN
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY CONSUMERS ENERGY COMPANY (&#147;CONSUMERS&#148;) OR ANY
UNDERWRITER, DEALER OR AGENT. THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH THEY RELATE OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY
CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED OR INCORPORATED HEREIN OR
THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV><BR>
<B>TABLE OF CONTENTS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="90%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Page</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#115">Summary </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#116">Risk Factors </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#117">Where You Can Find More Information </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#118">Consumers Energy Company </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">4</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#119">Consumers Energy Company Trusts </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">5</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#120">Use of Proceeds </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">7</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#121">Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and Preference Dividends</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">7</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#122">Description of Securities </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">8</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#123">Plan of Distribution </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">24</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#124">Legal Matters </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">25</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#125">Experts </A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">25</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left">
<A name="115"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV><BR>
<B>SUMMARY</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus is part of a registration statement on Form S-3 that we filed with the
Securities and Exchange Commission (&#147;SEC&#148;) utilizing a &#147;shelf&#148; registration process. Under this
shelf process, we may sell any combination of securities described in this prospectus in one or
more offerings, up to a total dollar amount of $1,500,000,000. This prospectus provides you with a
general description of the securities we may offer. Each time we sell securities, we will provide a
prospectus supplement containing specific information about the terms of that offering. The
prospectus supplement may also add, update or change information contained in this prospectus. You
should read both this prospectus and any prospectus supplement together with additional information
described below under the heading &#147;Where You Can Find More Information.&#148;
</DIV>
<DIV align="left">
<A name="116"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RISK FACTORS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Before acquiring any of the securities that may be offered hereby, you should carefully
consider the risks discussed in the section of our Form 10-Q for the quarter ended September&nbsp;30,
2004, filed on November&nbsp;4, 2004, entitled &#147;Forward-Looking Statements and Risk Factors,&#148; which is
incorporated in this document by reference. You should also consider the risk factors listed in
the accompanying prospectus supplement or supplements and you should read this prospectus and the
accompanying prospectus supplement or supplements carefully before you invest.
</DIV>
<DIV align="left">
<A name="117"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>WHERE YOU CAN FIND MORE INFORMATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We file reports, proxy statements and other information with the SEC under File No.&nbsp;1-5611.
Our SEC filings are also available over the Internet at the SEC&#146;s web site at http://www.sec.gov.
You may also read and copy any document we file at the SEC&#146;s public reference room at 450 Fifth
Street N.W., Room&nbsp;1024, Washington D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more
information on the public reference rooms and their copy charges. You may also inspect our SEC
reports and other information at the New York Stock Exchange, 20 Broad Street, New York, New York
10005. You can find additional information about us, including our Annual Report on Form 10-K for
the year ended December&nbsp;31, 2003 and our Quarterly Reports on Form 10-Q for the quarters ended
March&nbsp;31, 2004, June&nbsp;30, 2004 and September&nbsp;30, 2004 on the Web site of our parent company at
http://www.cmsenergy.com. The information on this Web site is not a part of this prospectus.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are &#147;incorporating by reference&#148; information into this prospectus. This means that we are
disclosing important information by referring to another document filed separately with the SEC.
The information incorporated by reference is deemed to be part of this prospectus, except for any
information superseded by information in this prospectus. This prospectus incorporates by reference
the documents set forth below that we have previously filed with the SEC. These documents contain
important information about us and our finances.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Annual Report on Form 10-K/A for the year ended December&nbsp;31, 2003 filed on July&nbsp;21, 2004</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Quarterly Report on Form 10-Q for the quarter ended March&nbsp;31, 2004 filed on May&nbsp;7, 2004,
Quarterly Report on Form 10-Q for the quarter ended June&nbsp;30, 2004 filed on August&nbsp;6, 2004
and Quarterly Report on Form 10-Q for the quarter ended September&nbsp;30, 2004 filed on November
4, 2004</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Current Reports on Form 8-K filed on January&nbsp;22, 2004, March&nbsp;18, 2004, June&nbsp;3, 2004,
August&nbsp;20, 2004, September&nbsp;1, 2004, October&nbsp;6, 2004, October&nbsp;12, 2004, October&nbsp;13, 2004 and
October&nbsp;19, 2004</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The documents filed by us with the SEC pursuant to Section&nbsp;13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 (the &#147;Exchange Act&#148;) between the date of the initial filing of the
registration statement of which this prospectus is a part and the effectiveness of the registration
statement, as well as subsequent to the date of this prospectus, but prior to its termination, are
also incorporated by reference into this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will provide, upon your oral or written request, a copy of any or all of the information
that has been incorporated by reference in this prospectus but not delivered with this prospectus.
You may request a copy of these filings at no cost by writing or telephoning us at the following
address:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Consumers Energy Company<BR>
One Energy Plaza<BR>
Jackson, Michigan 49201<BR>
Tel: (517)&nbsp;788-0550<BR>
Attention: Office of the Secretary

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You should rely only on the information contained or incorporated by reference in this
prospectus. We have not authorized anyone to provide you with information that is different from
this information.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Separate financial statements of the trusts have not been included in this prospectus.
Consumers and the trusts do not consider such financial statements to be helpful because:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Consumers beneficially owns directly or indirectly all of the undivided beneficial
interests in the assets of the trusts (other than the beneficial interests represented by
the trust preferred securities). See &#147;Consumers Energy Company Trusts,&#148; &#147;Description of
Securities &#151; Trust Preferred Securities&#148; and &#147;Description of Securities &#151; The Guarantees.&#148;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Consumers will guarantee the trust preferred securities such that the holders of the
trust preferred securities, with respect to the payment of distributions and amounts upon
liquidation, dissolution and winding-up, are at least in the same position with regard to
the assets of Consumers as a preferred stockholder of Consumers.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In future filings under the Exchange Act, an audited footnote to Consumers&#146; annual
financial statements will state that the trusts are wholly-owned by Consumers, that the sole
assets of the trusts are the senior notes or the subordinated debentures of Consumers having
a specified total principal amount, and, considered together, the back-up undertakings,
including the guarantees, constitute a full and unconditional guarantee by Consumers of the
trusts&#146; obligations under the trust preferred securities issued by the trusts.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Each trust is a newly created special purpose entity, has no operating history, no
independent operations and is not engaged in, and does not propose to engage in, any
activity other than as described under &#147;Consumers Energy Company Trusts.&#148;</TD>
</TR>

</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="118"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CONSUMERS ENERGY COMPANY</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumers primarily consists of electric and gas utility operations. Consumers was formed in
Michigan in 1968 and is the successor to a corporation organized in Maine in 1910, which did
business in Michigan from 1915 to 1968. Industries in Consumers&#146; service areas include automotive,
metal, chemical, food and wood products and a diversified group of other industries. Consumers&#146;
consolidated operating revenue was $4.435&nbsp;billion in 2003, $4.169&nbsp;billion in 2002, and $3.976
billion in 2001.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 1%"><B><I>Electric Utility Operations</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumers&#146; electric utility operating revenue was $2.590&nbsp;billion in 2003, $2.648&nbsp;billion in
2002, and $2.633&nbsp;billion in 2001. Based on the average number of customers, Consumers&#146; electric
utility operations, if independent, would be the thirteenth largest electric utility company in the
United States. The electric operations of Consumers include the generation, purchase, distribution
and sale of electricity. In 2003, total electric sales were 36&nbsp;billion kilowatt-hours (&#147;kWh&#148;) and
retail open access deliveries were 3&nbsp;billion kWh. At year-end 2003, it served customers in 61 of
the 68 counties of Michigan&#146;s Lower Peninsula. Principal cities served include Battle Creek, Flint,
Grand Rapids, Jackson, Kalamazoo, Midland, Muskegon and Saginaw. Consumers&#146; electric utility
customer base includes a mix of residential, commercial and diversified industrial customers, the
largest segment of which is the automotive industry. Consumers&#146; electric operations are not
dependent upon a single customer, or even a few customers, and the loss of any one or even a few of
such customers is not reasonably likely to have a material adverse effect on its financial
condition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December&nbsp;31, 2003, Consumers owned and operated 30 electric generating plants with an
aggregate of 6,431 megawatts (&#147;MW&#148;) of capacity. Also, in 2003, Consumers purchased up to 2,353 MW
of net capacity from other power producers, which amounted to 30.5% of Consumers&#146; total system
requirements, the largest of which was the Midland Cogeneration Venture Limited Partnership in
which Consumers has a 49% interest through CMS Midland, Inc. (&#147;MCV Partnership&#148;). Consumers also
owns:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>347 miles of high voltage distribution radial lines operating at 120 kilovolts and above;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>4,164 miles of high voltage distribution overhead lines operating at 23 kilovolts and 46
kilovolts;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>16 subsurface miles of high voltage distribution underground lines operating at 23
kilovolts and 46 kilovolts;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>54,922 miles of electric distribution overhead lines;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>8,526 subsurface miles of underground distribution lines; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>substations having an aggregate transformer capacity of 20,605,680 kilovoltamperes.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumers generates electricity principally from coal and nuclear fuel. Consumers has four
generating plant sites that use coal as a fuel source and constituted 76% of its baseload capacity
in 2003. In 2003, these plants produced a combined total of 20,091&nbsp;million kWhs of electricity and
burned 10.1&nbsp;million tons of coal. Consumers owns Palisades, an operating nuclear power plant
located near South Haven, Michigan. In May&nbsp;2001, with the approval of the Nuclear Regulatory
Commission, Consumers transferred its authority to operate Palisades to the Nuclear Management
Company (&#147;NMC&#148;). The Palisades nuclear fuel supply responsibilities are under the control of NMC
acting as agent for Consumers. During 2003, Palisades&#146; net generation was 6,151&nbsp;million kWhs,
constituting 23.3% of Consumers&#146; baseload supply.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 1%"><B><I>Gas Utility Operations</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumers&#146; gas utility operating revenue was $1.845&nbsp;billion in 2003, $1.519&nbsp;billion in 2002,
and $1.338&nbsp;billion in 2001. Based on the average number of customers, Consumers&#146; gas utility
operations, if independent, would be the tenth largest gas utility company in the United States.
Consumers&#146; gas utility operations purchase, transport, store, distribute and sell natural gas. In
2003, total deliveries of natural gas sold by Consumers and by other sellers who deliver natural
gas through Consumers&#146; pipeline and distribution network to ultimate customers, including the MCV
Partnership, totaled 388&nbsp;billion cubic feet (&#147;bcf&#148;). As of December&nbsp;31, 2003, Consumers was
authorized to provide service in 54 of the 68 counties in Michigan&#146;s Lower Peninsula. Principal
cities served include Bay City, Flint, Jackson, Kalamazoo, Lansing, Pontiac and Saginaw, as well as
the suburban Detroit area, where nearly 900,000 of the gas customers are located. Consumers&#146; gas
operations are not dependent upon a single customer, or even a few customers, and the loss of any
one or even a few of such customers is not reasonably likely to have a material adverse effect on
its financial condition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumers&#146; gas distribution and transmission system consists of:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>25,055 miles of distribution mains throughout Michigan&#146;s Lower Peninsula;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>2,408 miles of transmission lines throughout Michigan&#146;s Lower Peninsula;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>7 compressor stations with a total of 162,000 installed horsepower; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>14 gas storage fields located across Michigan with an aggregate storage capacity
of 331 bcf and a working storage capacity of 130 bcf.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total 2003 purchases of gas supply included 66% from United States producers outside Michigan,
22% from Canadian producers and
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">3% from Michigan producers. Authorized suppliers in the gas customer choice program supplied
the remaining 9% of gas delivered by Consumers. Consumers also has firm transportation agreements
with independent pipeline companies for the delivery of gas. Consumers uses these agreements to
deliver gas to Michigan for ultimate deliveries to market. In total, Consumers&#146; firm transportation
and city gate arrangements are capable of delivering over 95% of Consumers&#146; total gas supply
requirements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing information concerning Consumers does not purport to be comprehensive. For
additional information concerning Consumers&#146; business and affairs, including its capital
requirements and external financing plans, pending legal and regulatory proceedings and
descriptions of certain laws and regulations to which Consumers is subject, prospective purchasers
should refer to the documents incorporated herein by reference. See &#147;Where You Can Find More
Information&#148; above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The address of Consumers&#146; principal executive offices is One Energy Plaza, Jackson, Michigan
49201. Its telephone number is (517)&nbsp;788-0550.
</DIV>
<DIV align="left">
<A name="119"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CONSUMERS ENERGY COMPANY TRUSTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumers Energy Company Financing V and Consumers Energy Company Financing VI are statutory
business trusts created under the Delaware Business Trust Act by way of:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Declaration of Trust executed by Consumers, as sponsor, and the trustees of the trusts;
and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the filing of certificates of trust with the Secretary of State of the State of Delaware.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the time of public issuance of the trust preferred securities, each Declaration of Trust
will be amended and restated in its entirety and will be qualified as an indenture under the Trust
Indenture Act of 1939, as amended. Consumers will directly or indirectly acquire common securities
of each trust in a total liquidation amount of at least 3% of the total capital of the trust. Each
trust exists for the exclusive purposes of:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>issuing the trust preferred securities and common securities representing undivided
beneficial interests in the assets of the trust;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>investing the gross proceeds of the common securities and the trust preferred securities
in the senior notes or subordinated debentures; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>engaging in only those other activities necessary or incidental thereto.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each trust has a term of approximately 55&nbsp;years, but may terminate earlier as provided in the
amended and restated Declaration of Trust.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The proceeds from the offering of the trust preferred securities and the sale of the common
securities may be used by each trust to purchase from Consumers senior notes or subordinated
debentures in a total principal amount equal to the total liquidation preference of the common
securities and the trust preferred securities. The Consumers notes or debentures would bear
interest at an annual rate equal to the annual distribution rate of the common securities and the
trust preferred securities and would have certain redemption terms that correspond to the
redemption terms for the common securities and the trust preferred securities. The senior notes
will rank on an equal basis with all other unsecured debt of Consumers except subordinated debt.
The subordinated debentures will rank subordinate in right of payment to all of Consumers&#146; senior
indebtedness (as defined in this prospectus). Distributions on the common securities and the trust
preferred securities may not be made unless each trust receives corresponding interest payments on
the senior notes or the subordinated debentures from Consumers. Consumers will irrevocably
guarantee, on a senior or subordinated basis, as applicable, and to the extent set forth in the
guarantee, with respect to each of the common securities and the trust preferred securities, the
payment of distributions, the redemption price, including all accrued or deferred and unpaid
distributions, and payment on liquidation, but only to the extent of funds on hand. Each guarantee
will be unsecured and will be either equal to or subordinate to, as applicable, all senior
indebtedness, of Consumers. Upon the occurrence of certain events (subject to the conditions to be
described in an accompanying prospectus supplement) each trust may be liquidated and the holders of
the common securities and the trust preferred securities could receive senior notes or subordinated
debentures in lieu of any liquidating cash distribution.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the amended and restated Declaration of Trust, the number of trustees of each
trust will initially be four. Two of the trustees will be persons who are employees or officers of
or who are affiliated with Consumers and will be referred to as the regular trustees. The third
trustee will be a financial institution that is unaffiliated with Consumers, which trustee will
serve as property trustee under the applicable amended and restated Declaration of Trust and as
indenture trustee for the purposes of compliance with the provisions of the Trust Indenture Act of
1939. Initially, The Bank of New York, a New York banking corporation, will be the property trustee
until removed or replaced by the holder of the common securities. For the purpose of compliance
with the provisions of the Trust Indenture Act of 1939, The Bank of New York will also act as
guarantee trustee. The fourth trustee, The Bank of New York
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(Delaware), will act as the Delaware trustee for the purposes of the Delaware Business Trust
Act, until removed or replaced by the holder of the common securities. See &#147;Description of
Securities &#151; The Guarantees.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The property trustee will hold title to the applicable senior notes or subordinated debentures
for the benefit of the holders of the common securities and the trust preferred securities and the
property trustee will have the power to exercise all rights, powers and privileges under the
applicable indentures as the holder of the senior notes or subordinated debentures. In addition,
the property trustee will maintain exclusive control of a segregated non-interest bearing bank
account to hold all payments made in respect of the senior notes or subordinated debentures for the
benefit of the holders of the common securities and the trust preferred securities. The property
trustee will make payments of distributions and payments on liquidation, redemption and otherwise
to the holders of the common securities and the trust preferred securities out of funds from the
segregated non-interest bearing bank account. The guarantee trustee will hold the guarantees for
the benefit of the holders of the common securities and the trust preferred securities. Consumers,
as the direct or indirect holder of all the common securities, will have the right to appoint,
remove or replace any of the trustees. Consumers will also have the right to increase or decrease
the number of trustees, as long as the number of trustees shall be at least three, a majority of
which shall be regular trustees. Consumers will pay all fees and expenses related to the trusts and
the offering of the common securities and the trust preferred securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The rights of the holders of the trust preferred securities, including economic rights, rights
to information and voting rights, are set forth in the applicable amended and restated Declaration
of Trust, the Delaware Business Trust Act and the Trust Indenture Act of 1939.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The trustee for each trust in the State of Delaware is The Bank of New York (Delaware), White
Clay Center, Route 273, Newark, Delaware 19711.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The principal place of business of each trust will be c/o Consumers Energy Company, One Energy
Plaza, Jackson, Michigan 49201.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="120"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>USE OF PROCEEDS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The proceeds received by each of the trusts from the sale of its trust preferred securities or
the common securities will be invested in the senior notes or the subordinated debentures. As will
be more specifically set forth in the applicable prospectus supplement, Consumers will use those
borrowed amounts and the net proceeds from the sale of senior notes, first mortgage bonds or
subordinated debentures offered hereby for its general corporate purposes, including capital
expenditures, investment in subsidiaries, working capital and repayment of debt. Any specific
allocation of the proceeds to a particular purpose that has been made at the date of any prospectus
supplement will be described in the appropriate prospectus supplement.
</DIV>
<DIV align="left">
<A name="121"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RATIO OF EARNINGS TO FIXED CHARGES AND<BR>
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERENCE DIVIDENDS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The ratios of earnings to fixed charges and the ratios of earnings to combined fixed charges
and preference dividends for the nine months ended September&nbsp;30, 2004 and each of the years ended
December&nbsp;31, 1999 through 2003, are as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Nine Months</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="19">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Ended</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="19">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>September 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="19"><B>Year Ended December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2002</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2001</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2000</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>1999</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ratio of earnings to: (a)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fixed charges</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.98</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">3.59</TD>
    <TD nowrap>(b)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2.28</TD>
    <TD nowrap>(c)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.46</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Combined fixed charges
and preference dividends</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.98</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2.88</TD>
    <TD nowrap>(b)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.87</TD>
    <TD nowrap>(c)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.99</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(a)</TD>
    <TD>&nbsp;</TD>
    <TD>For purposes of computing the ratio, earnings represent the sum of pretax income, net interest charges and the
estimated interest portions of lease rentals, plus distributed income of equity investees less earnings from equity
investees. Earnings for the ratio of earnings to combined fixed charges and preference dividends also includes the
amount required to pay distributions on preferred securities and the amount of pretax earnings required to pay the
dividends on outstanding preferred stock.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(b)</TD>
    <TD>&nbsp;</TD>
    <TD>Excludes a cumulative effect of change in accounting after-tax gain of $18&nbsp;million: if included, ratio would be
unchanged, since the change in accounting resulted from the equity-based subsidiary, MCV Partnership. The total net
income of equity-based subsidiaries are excluded from determining earnings as defined.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(c)</TD>
    <TD>&nbsp;</TD>
    <TD>Excludes a cumulative effect of change in accounting after-tax loss of $11&nbsp;million; if included, ratio would be 1.81.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->7<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">





<DIV align="left">
<A name="122"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DESCRIPTION OF SECURITIES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Introduction</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Specific terms of the debt securities consisting of the senior notes, first mortgage bonds or
subordinated debentures, or the trust preferred securities, or any combination of these securities,
and the irrevocable guarantees of Consumers with respect to each of the common securities and the
preferred securities of the trust, for which this prospectus is being delivered, will be set forth
in an accompanying prospectus supplement or supplements. The prospectus supplement will set forth
with regard to the particular offered securities, without limitation, the following:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>in the case of debt securities, the designation, total principal amount, denomination,
maturity, premium, if any, any exchange, conversion, redemption or sinking fund provisions,
any interest rate (which may be fixed or variable), the time or method of calculating any
interest payments, the right of Consumers, if any, to defer payment or interest on the debt
securities and the maximum length of such deferral, put options, if any, public offering
price, ranking, any listing on a securities exchange and other specific terms of the
offering; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>in the case of trust preferred securities, the designation, number of shares, liquidation
preference per security, initial public offering price, any listing on a securities
exchange, dividend rate (or method of calculation thereof), dates on which dividends shall
be payable and dates from which dividends shall accrue, any voting rights, any redemption,
exchange, conversion or sinking fund provisions and any other rights, preferences,
privileges, limitations or restrictions relating to a specific series of the trust preferred
securities including a description of the Consumers guarantee, as the case may be.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Debt Securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Senior notes will be issued under a senior note indenture. The first mortgage bonds will be
issued under a mortgage indenture. The subordinated debentures will be issued under a subordinated
debt indenture. The senior note indenture, the mortgage indenture and the subordinated debt
indenture are sometimes referred to in this prospectus individually as an &#147;indenture&#148; and
collectively as the &#147;indentures.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following briefly summarizes the material provisions of the indentures and the debt
securities. You should read the more detailed provisions of the applicable indenture, including the
defined terms, for provisions that may be important to you. You should also read the particular
terms of a series of debt securities, which will be described in more detail in the applicable
prospectus supplement. Copies of the indentures may be obtained from Consumers or the applicable
trustee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless otherwise provided in the applicable prospectus supplement, the trustee under the
senior note indenture will be JPMorgan Chase Bank, N.A., the trustee under the mortgage indenture
will be JPMorgan Chase Bank, N.A. and the trustee under the subordinated debt indenture will be The
Bank of New York.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>General</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The indentures provide that debt securities of Consumers may be issued in one or more series,
with different terms, in each case as authorized on one or more occasions by Consumers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal income tax consequences and other special considerations applicable to any debt
securities issued by Consumers at a discount will be described in the applicable prospectus
supplement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The applicable prospectus supplement relating to any series of debt securities will describe
the following terms, where applicable:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the title of the debt securities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>whether the debt securities will be senior or subordinated debt;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the total principal amount of the debt securities;</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->8<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the percentage of the principal amount at which the debt securities will be sold and,
if applicable, the method of determining the price;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the maturity date or dates;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any interest rate or the method of computing any interest rate;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the date or dates from which any interest will accrue, or how such date or dates will
be determined, and the interest payment date or dates and any related record dates;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the location where payments on the debt securities will be made;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any terms and conditions on which the debt securities may be redeemed at the option of
Consumers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any obligation of Consumers to redeem, purchase or repay the debt securities at the
option of a holder upon the happening of any event and the terms and conditions of
redemption, purchase or repayment;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any provisions for the discharge of Consumers&#146; obligations relating to the debt
securities by deposit of funds or United States government obligations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>whether the debt securities are to trade in book-entry form and any terms and
conditions for exchanging the global security in whole or in part for paper certificates;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any material provisions of the applicable indenture described in this prospectus that
do not apply to the debt securities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any additional amounts with respect to the debt securities that Consumers will pay to a
non-United States person because of any tax, assessment or governmental charge withheld or
deducted and, if so, any option of Consumers to redeem the debt securities rather than
paying these additional amounts;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any additional events of default; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any other specific terms of the debt securities.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Concerning the Trustees</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each of JPMorgan Chase Bank, N.A., the trustee under the senior note indenture for the senior
notes, JPMorgan Chase Bank, N.A., the trustee under the mortgage indenture for the first mortgage
bonds, and The Bank of New York, the trustee under the subordinated debt indenture for the
subordinated debentures, is one of a number of banks with which Consumers and its subsidiaries
maintain ordinary banking relationships, including credit facilities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Exchange and Transfer</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt securities may be presented for exchange. Registered debt securities may be presented for
registration of transfer at the offices of the applicable trustee and, subject to the restrictions
set forth in the debt security and in the applicable prospectus supplement, without service charge,
but upon payment of any taxes or other governmental charges due in connection with the transfer,
subject to any limitations contained in the applicable indenture. Debt securities in bearer form
and any related coupons will be transferable by delivery.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Payment</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distributions on the debt securities in registered form will be made at the office or agency
of the applicable trustee in the Borough of Manhattan, The City of New York or its other designated
office. However, at the option of Consumers, payment of any interest may be made by check or by
wire transfer. Payment of any interest due on debt securities in registered form will be made to
the persons in whose name the debt securities are registered at the close of business on the record
date for such interest payments. Payments made in any other manner will be specified in the
applicable prospectus supplement.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->9<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Governing Law</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each indenture and the debt securities will be governed by, and construed in accordance with,
the laws of the State of Michigan unless the laws of another jurisdiction shall mandatorily apply.
The rights, duties and obligations of the subordinated note trustee are governed by and construed
in accordance with the laws of the State of New York.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Senior Notes</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>General</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The senior notes will be issued under a senior note indenture dated as of February&nbsp;1, 1998, as
supplemented (the &#147;senior note indenture&#148;) with JPMorgan Chase Bank, N.A., as the senior note
trustee. The following summaries of some important provisions of the senior note indenture
(including its supplements by such reference) do not purport to be complete and are subject to, and
qualified in their entirety by, all of the provisions of the senior note indenture. The senior note
indenture is incorporated by reference in this prospectus and is available upon request to the
senior note trustee. In addition, capitalized terms used in this section and not otherwise defined
in this prospectus shall have the meaning given to them in the senior note indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Security; Release Date</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Until the release date (as described in the next paragraph), the senior notes will be secured
by one or more series of Consumers&#146; first mortgage bonds issued and delivered by Consumers to the
senior note trustee. See &#147;First Mortgage Bonds.&#148; Upon the issuance of a series of senior notes
prior to the release date, Consumers will simultaneously issue and deliver to the senior note
trustee, as security for all senior notes, a series of first mortgage bonds that will have the same
stated maturity date and corresponding redemption provisions, and will be in the same total
principal amount as the series of the senior notes being issued. Any series of first mortgage bonds
securing senior notes may, but need not, bear interest. Any payment by Consumers to the senior note
trustee of principal of, and interest and/or premium, if any, on, a series of first mortgage bonds
will be applied by the senior note trustee to satisfy Consumers&#146; obligations with respect to
principal of, and interest and/or premium, if any, on, the corresponding senior notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The &#147;release date&#148; will be the date that all first mortgage bonds of Consumers issued and
outstanding under a mortgage indenture with JPMorgan Chase Bank, N.A. as mortgage trustee, other
than first mortgage bonds securing senior notes, have been retired (at, before or after their
maturity) through payment, redemption or otherwise. On the release date, the senior note trustee
will deliver to Consumers, for cancellation, all first mortgage bonds securing senior notes. Not
later than 30&nbsp;days thereafter, the senior note trustee will provide notice to all holders of senior
notes of the occurrence of the release date. As a result, on the release date, the first mortgage
bonds securing senior notes will cease to secure the senior notes. The senior notes will then
become unsecured general obligations of Consumers and will rank equally with other unsecured
indebtedness of Consumers. Each series of first mortgage bonds that secures senior notes will be
secured by a lien on certain property owned by Consumers. See &#147;First Mortgage Bonds &#151; Priority And
Security.&#148; Upon the payment or cancellation of any outstanding senior notes, the senior note
trustee will surrender to Consumers for cancellation an equal principal amount of the related
series of first mortgage bonds. Consumers will not permit, at any time prior to the release date,
the total principal amount of first mortgage bonds securing senior notes held by the senior note
trustee to be less than the total principal amount of senior notes outstanding. Following the
release date, Consumers will cause the mortgage to be discharged and will not issue any additional
first mortgage bonds under the mortgage. While Consumers will be precluded after the release date
from issuing additional first mortgage bonds, it will not be precluded under the senior note
indenture or senior notes from issuing or assuming other secured debt, or incurring liens on its
property, except to the extent indicated below under &#147;&#151; Certain Covenants Of Consumers &#151;
Limitation on Liens.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Events Of Default</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following constitute events of default under senior notes of any series:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) failure to pay principal of and premium, if any, on any senior note of such series when
due;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) failure to pay interest on any senior note of such series when due for 60&nbsp;days;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) failure to perform any other covenant or agreement of Consumers in the senior notes of
such series for 90&nbsp;days after written notice to Consumers by the senior note trustee or the
holders of at least 33% in total principal amount of the outstanding senior notes;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) prior to the release date, a default under the mortgage; provided, however, that the
waiver or cure of such default and the rescission and annulment of the consequences under the
mortgage will be a waiver of the corresponding event of default under the senior note indenture
and a rescission and annulment of the consequences under the senior note indenture; and
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->10<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) certain events of bankruptcy, insolvency, reorganization, assignment or receivership of
Consumers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If an event of default occurs and is continuing, either the senior note trustee or the holders
of a majority in total principal amount of the outstanding senior notes may declare the principal
amount of all senior notes to be due and payable immediately.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The senior note trustee generally will be under no obligation to exercise any of its rights or
powers under the senior note indenture at the request or direction of any of the holders of senior
notes of such series unless those holders have offered to the senior note trustee reasonable
security or indemnity. Subject to the provisions for indemnity and certain other limitations
contained in the senior note indenture, the holders of a majority in principal amount of the
outstanding senior notes of such series generally will have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the senior note trustee, or of
exercising any trust or power conferred on the senior note trustee. The holders of a majority in
principal amount of the outstanding senior notes of such series generally will have the right to
waive any past default or event of default (other than a payment default) on behalf of all holders
of senior notes of such series.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No holder of senior notes of a series may institute any action against Consumers under the
senior note indenture unless:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) that holder gives to the senior note trustee advance written notice of default and its
continuance;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the holders of a majority in total principal amount of senior notes of such series then
outstanding affected by that event of default request the senior note trustee to institute such
action;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) that holder has offered the senior note trustee reasonable indemnity; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) the senior note trustee shall not have instituted such action within 60&nbsp;days of such
request.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Furthermore, no holder of senior notes will be entitled to institute any such action if and to
the extent that that action would disturb or prejudice the rights of other holders of senior notes
of such series.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Within 90&nbsp;days after the occurrence of a default with respect to the senior notes of a series,
the senior note trustee must give the holders of the senior notes of such series notice of any such
default known to the senior note trustee, unless cured or waived. The senior note trustee may
withhold such notice if it determines in good faith that it is in the interest of such holders to
do so except in the case of default in the payment of principal of, and interest and/or premium, if
any, on, any senior notes of such series. Consumers is required to deliver to the senior note
trustee each year a certificate as to whether or not, to the knowledge of the officers signing such
certificate, Consumers is in compliance with the conditions and covenants under the senior note
indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Modification</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumers and the senior note trustee cannot modify and amend the senior note indenture
without the consent of the holders of a majority in principal amount of the outstanding affected
senior notes. Consumers and the senior note trustee cannot modify and amend the senior note
indenture without the consent of the holder of each outstanding senior note of such series to:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) change the maturity date of any senior note of such series;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) reduce the rate (or change the method of calculation thereof) or extend the time of
payment of interest on any senior note of such series;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) reduce the principal amount of, or premium payable on, any senior note of such series;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) change the coin or currency of any payment of principal of, and interest and/or premium
on, any senior note of such series;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) change the date on which any senior note of such series may be redeemed or repaid at the
option of its holder or adversely affect the rights of a holder to institute suit for the
enforcement of any payment on or with respect to any senior note of such series;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) impair the interest of the senior note trustee in the first mortgage bonds securing the
senior notes of such series held by it or, prior to the release date, reduce the principal amount
of any series of first mortgage bonds securing the senior notes of such series to an amount less
than the principal amount of the related series of senior notes or alter the payment provisions
of such first mortgage bonds in a manner adverse to the holders of the senior notes; or
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->11<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) modify the senior notes of such series necessary to modify or amend the senior note
indenture or to waive any past default to less than a majority.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumers and the senior note trustee can modify and amend the senior note indenture without
the consent of the holders in certain cases, including:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) to add to the covenants of Consumers for the benefit of the holders or to surrender a
right conferred on Consumers in the senior note indenture;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) to add further security for the senior notes of such series;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) to add provisions enabling Consumers to be released with respect to one or more series
of outstanding senior notes from its obligations under the covenants upon satisfaction of
conditions with respect to such series of senior notes;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) to supply omissions, cure ambiguities or correct defects which actions, in each case,
are not prejudicial to the interests of the holders in any material respect; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) to make any other change that is not prejudicial to the holders of senior notes of such
series in any material respect.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A supplemental indenture which changes or eliminates any covenant or other provision of the
senior note indenture (or any supplemental indenture) which has expressly been included solely for
the benefit of one or more series of senior notes, or which modifies the rights of the holders of
senior notes of such series with respect to such covenant or provision, will be deemed not to
affect the rights under the senior note indenture of the holders of senior notes of any other
series.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Defeasance and Discharge</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The senior note indenture provides that Consumers will be discharged from any and all
obligations in respect to the senior notes of such series and the senior note indenture (except for
certain obligations such as obligations to register the transfer or exchange of senior notes,
replace stolen, lost or mutilated senior notes and maintain paying agencies) if, among other
things, Consumers irrevocably deposits with the senior note trustee, in trust for the benefit of
holders of senior notes of such series, money or certain United States government obligations, or
any combination of money or government obligations. The payment of interest and principal on the
deposits in accordance with their terms must provide money in an amount sufficient, without
reinvestment, to make all payments of principal of, and any premium and interest on, the senior
notes on the dates such payments are due in accordance with the terms of the senior note indenture
and the senior notes of such series. If all of the senior notes of such series are not due within
90&nbsp;days of such deposit by redemption or otherwise, Consumers must also deliver to the senior note
trustee an opinion of counsel to the effect that the holders of the senior notes of such series
will not recognize income, gain or loss for federal income tax purposes as a result of that
defeasance or discharge of the senior note indenture. Thereafter, the holders of senior notes must
look only to the deposit for payment of the principal of, and interest and any premium on, the
senior notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Consolidation, Merger and Sale or Disposition of Assets</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumers may consolidate with or merge into, or sell or otherwise dispose of its properties
as or substantially as an entirety if:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the new corporation is a corporation organized and existing under the laws of the United
States of America, any state thereof, or the District of Columbia;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the new corporation assumes the due and punctual payment of the principal of and premium
and interest on all the senior notes and the performance of every covenant of the senior note
indenture to be performed or observed by Consumers; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) if prior to the release date, the new corporation assumes Consumers&#146; obligations under
the mortgage indenture with respect to first mortgage bonds securing senior notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The conveyance or other transfer by Consumers of:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) all or any portion of its facilities for the generation of electric energy;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) all of its facilities for the transmission of electric energy; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) all of its facilities for the distribution of natural gas;
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">in each case considered alone or in any combination with properties described in (1), (2)&nbsp;or (3)&nbsp;of
this sentence, will not be considered a conveyance or other transfer of all the properties of
Consumers, as or substantially as an entirety.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Certain Covenants Of Consumers</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Limitation on Liens</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;So long as any senior notes are outstanding, Consumers may not issue, assume, guarantee or
permit to exist after the release date any debt that is secured by any mortgage, security interest,
pledge or lien (each a &#147;lien&#148;) of or upon any operating property of Consumers, whether owned at the
date of the senior note indenture or thereafter acquired, without in any such case effectively
securing the senior notes (together with, if Consumers shall so determine, any other indebtedness
of Consumers ranking equally with the senior notes) equally and ratably with such debt (but only so
long as such debt is so secured). The foregoing restriction will not apply to:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) liens on any operating property existing at the time of its acquisition (which liens may
also extend to subsequent repairs, alterations and improvements to such operating property);
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) liens on operating property of a corporation existing at the time such corporation is
merged into or consolidated with, or such corporation disposes of its properties (or those of a
division) as or substantially as an entirety to, Consumers;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) liens on operating property to secure the cost of acquisition, construction, development
or substantial repair, alteration or improvement of property or to secure indebtedness incurred
to provide funds for any such purpose or for reimbursement of funds previously expended for any
such purpose, provided such liens are created or assumed contemporaneously with, or within 18
months after, such acquisition or the completion of substantial repair or alteration,
construction, development or substantial improvement;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) liens in favor of any state or any department, agency or instrumentality or political
subdivision of any state, or for the benefit of holders of securities issued by any such entity
(or providers of credit enhancement with respect to such securities), to secure any debt
(including, without limitation, obligations of Consumers with respect to industrial development,
pollution control or similar revenue bonds) incurred for the purpose of financing all or any part
of the purchase price or the cost of substantially repairing or altering, constructing,
developing or substantially improving operating property of Consumers; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) any extension, renewal or replacement (or successive extensions, renewals or
replacements), in whole or in part, of any lien referred to in clauses (1)&nbsp;through (4), provided,
however, that the principal amount of debt secured thereby and not otherwise authorized by said
clauses (1)&nbsp;to (4), inclusive, shall not exceed the principal amount of debt, plus any premium or
fee payable in connection with any such extension, renewal or replacement, so secured at the time
of such extension, renewal or replacement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These restrictions will not apply to the issuance, assumption or guarantee by Consumers of
debt secured by a lien which would otherwise be subject to the foregoing restrictions up to a total
amount which, together with all other secured debt of Consumers (not including secured debt
permitted under any of the foregoing exceptions) and the value of sale and lease-back transactions
existing at such time (other than sale and lease-back transactions the proceeds of which have been
applied to the retirement of certain indebtedness, sale and lease-back transactions in which the
property involved would have been permitted to be subjected to a lien under any of the foregoing
exceptions in clauses (1)&nbsp;to (5)&nbsp;and sale and lease-back transactions that are permitted by the
first sentence of &#147;Limitation on Sale and Leaseback Transactions&#148; below), does not exceed the
greater of 15% of Net Tangible Assets or 15% of Capitalization.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Limitation on Sale and Leaseback Transactions</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;So long as senior notes are outstanding, Consumers may not enter into or permit to exist after
the release date any sale and lease-back transaction with respect to any operating property (except
for transactions involving leases for a term, including renewals, of not more than 48&nbsp;months), if
the purchaser&#146;s commitment is obtained more than 18&nbsp;months after the later of the completion of the
acquisition, construction or development of such operating property or the placing in operation of
such operating property or of such operating property as constructed or developed or substantially
repaired, altered or improved. This restriction will not apply if:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Consumers would be entitled under any of the provisions described in clauses (1)&nbsp;to (5)
of the first sentence of the second paragraph under &#147;Limitation on Liens&#148; above to issue, assume,
guarantee or permit to exist debt secured by a lien on such operating property without equally
and ratably securing the senior notes;
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->13<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) after giving effect to such sale and lease-back transaction, Consumers could incur
pursuant to the provisions described in the second sentence of the second paragraph under
&#147;Limitation on Liens,&#148; at least $1.00 of additional debt secured by liens (other than liens
permitted by clause (1)); or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Consumers applies within 180&nbsp;days an amount equal to, in the case of a sale or transfer
for cash, the net proceeds (not exceeding the net book value), and, otherwise, an amount equal to
the fair value (as determined by its Board of Directors) of the operating property so leased to
the retirement of senior notes or other debt of Consumers ranking equally with, the senior notes,
subject to reduction for senior notes and such debt retired during such 180-day period otherwise
than pursuant to mandatory sinking fund or prepayment provisions and payments at stated maturity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Voting Of Senior Note Mortgage Bonds Held By the Senior Note Trustee</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The senior note trustee, as the holder of first mortgage bonds securing senior notes, will
attend any meeting of bondholders under the mortgage indenture, or, at its option, will deliver its
proxy in connection therewith as it relates to matters with respect to which it is entitled to vote
or consent. So long as no event of default under the senior note indenture has occurred and is
continuing, the senior note trustee will vote or consent:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) in favor of amendments or modifications of the mortgage indenture of substantially the
same tenor and effect as follows:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to eliminate the maintenance and replacement fund and to recover amounts of net property
additions previously applied in satisfaction thereof so that the same would become available
as a basis for the issuance of first mortgage bonds;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to eliminate sinking funds or improvement funds and to recover amounts of net property
additions previously applied in satisfaction thereof so that the same would become available
as a basis for the issuance of first mortgage bonds;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to eliminate the restriction on the payment of dividends on common stock and to eliminate
the requirements in connection with the periodic examination of the mortgaged and pledged
property by an independent engineer;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to permit first mortgage bonds to be issued under the mortgage indenture in a principal
amount equal to 70% of unfunded net property additions instead of 60%, to permit sinking
funds or improvement funds requirements (to the extent not otherwise eliminated) under the
mortgage indenture to be satisfied by the application of net property additions in an amount
equal to 70% of such additions instead of 60%, and to permit the acquisition of property
subject to certain liens prior to the lien of the mortgage indenture if the principal amount
of indebtedness secured by such liens does not exceed 70% of the cost of such property
instead of 60%;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to eliminate requirements that Consumers deliver a net earnings certificate for any
purpose under the mortgage indenture;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to raise the minimum dollar amount of insurance proceeds on account of loss or damage
that must be payable to the senior note trustee from $50,000 to an amount equal to the
greater of (A) $5,000,000 and (B)&nbsp;three per centum (3%) of the total principal amount of
first mortgage bonds outstanding;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to increase the amount of the fair value of property which may be sold or disposed of
free from the lien of the mortgage indenture, without any release or consent by the senior
note trustee, from not more than $25,000 in any calendar year to not more than an amount
equal to the greater of (A) $5,000,000 and (B)&nbsp;three per centum (3%) of the total principal
amount of first mortgage bonds then outstanding;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to permit certain mortgaged and pledged property to be released from the lien of the
mortgage indenture if, in addition to certain other conditions, the senior note trustee
receives purchase money obligations of not more than 70% of the fair value of such property
instead of 60% and to eliminate the further requirement for the release of such property
that the total principal amount of purchase money obligations held by the senior note
trustee not exceed 20% of the principal amount of first mortgage bonds outstanding; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to eliminate the restriction prohibiting the mortgage trustee from applying cash held by
it pursuant to the mortgage indenture to the purchase of bonds not otherwise redeemable at a
price exceeding 110% of the principal of such bonds, plus accrued interest; and</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) with respect to any other amendments or modifications of the mortgage indenture, as
follows: the senior note trustee shall vote all first mortgage bonds securing senior notes then
held by it, or consent with respect thereto, proportionately with the vote or consent of the
holders of all other first mortgage bonds outstanding under the mortgage indenture, the holders
of which are eligible to vote or consent. However, the senior note trustee will not vote in favor
of, or consent to, any amendment or modification of the
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->14<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">mortgage which, if it were an amendment or modification of the senior note indenture, would
require the consent of senior notes holders (as described under &#147;Modification&#148;) without the prior
consent of holders of senior notes which would be required for such an amendment or modification
of the senior note indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Concerning The Senior Note Trustee</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JPMorgan Chase Bank, N.A. is both the senior note trustee under the senior note indenture and
the mortgage trustee under the mortgage indenture. The senior note indenture provides that
Consumers&#146; obligations to compensate the senior note trustee and reimburse the senior note trustee
for expenses, disbursements and advances will constitute indebtedness which will be secured by a
lien generally prior to that of the senior notes upon all property and funds held or collected by
the senior note trustee as such.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>First Mortgage Bonds</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>General</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The first mortgage bonds issued either alone or securing senior notes will be issued under a
mortgage indenture dated as of September&nbsp;1, 1945, as amended and supplemented (the &#147;mortgage
indenture&#148;), with JPMorgan Chase Bank, N.A., as the mortgage trustee. The statements herein
concerning the mortgage indenture are an outline and do not purport to be complete and are subject
to, and qualified in their entirety by, all of the provisions of the mortgage indenture, which is
incorporated by reference herein. They make use of defined terms and are qualified in their
entirety by express reference to the cited sections and articles of the mortgage indenture, a copy
of which will be available upon request to the mortgage trustee or, in the case of first mortgage
bonds being issued to secure senior notes, the request should be made to the senior note trustee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;First mortgage bonds securing senior notes are to be issued under the mortgage indenture as
security for Consumers&#146; obligations under the senior note indenture and will be immediately
delivered to and registered in the name of the senior note trustee. The first mortgage bonds
securing senior notes will be issued as security for senior notes of a series and will secure the
senior notes of that series until the release date. The senior note indenture provides that the
senior note trustee shall not transfer any first mortgage bonds securing senior notes except to a
successor trustee, to Consumers (as provided in the senior note indenture) or in compliance with a
court order in connection with a bankruptcy or reorganization proceeding of Consumers. The senior
note trustee shall generally vote the first mortgage bonds securing senior notes proportionately
with what it believes to be the vote of all other first mortgage bonds then outstanding except in
connection with certain amendments or modifications of the mortgage indenture, as described under
&#147;Senior Notes &#151; Voting Of Senior Note Mortgage Bonds Held By the Senior Note Trustee.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;First mortgage bonds securing senior notes will correspond to the senior notes of the related
series in respect of principal amount, interest rate, maturity date and redemption provisions. Upon
payment of the principal or premium, if any, or interest on senior notes of a series, the related
first mortgage bonds in a principal amount equal to the principal amount of such senior notes will,
to the extent of such payment of principal, premium or interest, be deemed fully paid and the
obligation of Consumers to make such payment shall be discharged.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Priority And Security</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The first mortgage bonds issued either alone or securing senior notes of any series will rank
equally as to security with bonds of other series now outstanding or issued later under the
mortgage indenture. This security is a direct first lien on substantially all of Consumers&#146;
property and franchises (other than certain property expressly excluded from the lien (such as
cash, bonds, stock and certain other securities, contracts, accounts and bills receivables,
judgments and other evidences of indebtedness, stock in trade, materials or supplies manufactured
or acquired for the purpose of sale and/or resale in the usual course of business or consumable in
the operation of any of the properties of Consumers, natural gas, oil and minerals, motor vehicles
and certain real property listed in Schedule&nbsp;A to the mortgage indenture)). This lien is subject to
excepted encumbrances (and certain other limitations) as defined and described in the mortgage
indenture. It is also subject to certain provisions of Michigan law which provides that under
certain circumstances, the State of Michigan&#146;s lien against property on which it has incurred costs
related to any response activity that is subordinate to prior recorded liens can become superior to
such prior liens pursuant to court order. The mortgage indenture permits, with certain limitations,
the acquisition of property subject to prior liens and, under certain conditions, permits the
issuance of additional indebtedness under such prior liens to the extent of 60% of net property
additions made by Consumers to the property subject to such prior liens.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Release And Substitution Of Property</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The mortgage indenture provides that, subject to various limitations, property may be released
from the lien thereof when sold or exchanged, or contracted to be sold or exchanged, upon the basis
of:
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->15<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>cash deposited with the mortgage trustee;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>bonds or purchase money obligations delivered to the mortgage trustee;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>prior lien bonds delivered to the mortgage trustee or reduced or assumed by the
purchaser;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>property additions acquired in exchange for the property released; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>upon a showing that unfunded net property additions exist.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The mortgage indenture also permits the withdrawal of cash upon a showing that unfunded net
property additions exist or against the deposit of bonds or the application thereof to the
retirement of bonds.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Modification Of Mortgage Indenture</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The mortgage indenture, the rights and obligations of Consumers and the rights of the first
mortgage bondholders may be modified by Consumers with the consent of the holders of 75% in
principal amount of the first mortgage bonds and of not less than 60% of the principal amount of
each series affected. In general, however, no modification of the terms of payment of principal or
interest and no modification affecting the lien or reducing the percentage required for
modification is effective against any first mortgage bondholder without the first mortgage
bondholder&#146;s consent. Consumers has reserved the right without any consent or other action by the
holders of bonds of any series created after September&nbsp;15, 1993 or by the holder of any senior note
or exchange note, to amend the mortgage indenture in order to substitute a majority in principal
amount of first mortgage bonds outstanding under the mortgage indenture for the 75% requirement set
forth above (and then only in respect of such series of outstanding first mortgage bonds as shall
be affected by the proposed action) and to eliminate the requirement for a series-by-series consent
requirement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Concerning The Mortgage Trustee</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JPMorgan Chase Bank, N.A. is both the mortgage trustee under the mortgage indenture and the
senior note trustee under the senior note indenture. The mortgage indenture provides that
Consumers&#146; obligations to compensate the mortgage trustee and reimburse the trustee for expenses,
disbursements and advances will constitute indebtedness which will be secured by a lien generally
prior to that of the first mortgage bonds securing senior notes upon all property and funds held or
collected by the mortgage trustee as such.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The mortgage trustee or the holders of 20% in total principal amount of the first mortgage
bonds may declare the principal due on default, but the holders of a majority in total principal
amount may annul such declaration and waive the default if the default has been cured. Subject to
certain limitations, the holders of a majority in total principal amount may generally direct the
time, method and place of conducting any proceeding for the enforcement of the mortgage indenture.
No first mortgage bondholder has the right to institute any proceedings for the enforcement of the
mortgage indenture unless that holder has given the mortgage trustee written notice of a default,
the holders of 20% of outstanding first mortgage bonds shall have tendered to the mortgage trustee
reasonable security or indemnity against costs, expenses and liabilities and requested the mortgage
trustee to take action, the mortgage trustee shall have declined to take action or failed to do so
within sixty days and no inconsistent directions shall have been given by the holders of a majority
in total principal amount of the first mortgage bonds.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Defaults</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The mortgage indenture defines the following as &#147;defaults&#148;:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>failure to pay principal when due;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>failure to pay interest for sixty days;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>failure to pay any installment of any sinking or other purchase fund for ninety days;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>certain events in bankruptcy, insolvency or reorganization; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>failure to perform any other covenant for ninety days following written demand by the
mortgage trustee for Consumers to cure such failure.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumers has covenanted to pay interest on any overdue principal and (to the extent permitted
by law) on overdue installments of interest, if any, on the bonds under the mortgage indenture at
the rate of 6% per year. The mortgage indenture does not contain a provision requiring any periodic
evidence to be furnished as to the absence of default or as to compliance with the terms thereof.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->16<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">However, Consumers is required by law to furnish annually to the trustee a certificate as to
compliance with all conditions and covenants under the mortgage indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Subordinated Debentures</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The subordinated debentures will be issued under the subordinated debt indenture dated as of
January&nbsp;1, 1996, as supplemented (the &#147;subordinated debt indenture&#148;), with The Bank of New York, as
subordinated debt trustee, and will rank subordinated and junior in right of payment, to the extent
set forth in the subordinated debt indenture, to all &#147;senior indebtedness&#148; (as defined below) of
Consumers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If Consumers defaults in the payment of any distributions on any senior indebtedness when it
becomes due and payable after any applicable grace period, then, unless and until the default is
cured or waived or ceases to exist, Consumers cannot make a payment on account of or redeem or
otherwise acquire the subordinated debentures. The subordinated debt indenture provisions described
in this paragraph, however, do not prevent Consumers from making sinking fund payments in
subordinated debentures acquired prior to the maturity of senior indebtedness or, in the case of
default, prior to such default and notice thereof. If there is any insolvency, bankruptcy,
liquidation or other similar proceeding relating to Consumers, its creditors or its property, then
all senior indebtedness must be paid in full before any payment may be made to any holders of
subordinated debentures. Holders of subordinated debentures must return and deliver any payments
received by them, other than in a plan of reorganization or through a defeasance trust as described
above, directly to the holders of senior indebtedness until all senior indebtedness is paid in
full.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Senior indebtedness&#148; means distributions on the following, whether outstanding on the date of
execution of the subordinated debt indenture or thereafter incurred, created or assumed:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>indebtedness of Consumers for money borrowed by Consumers or evidenced by debentures
(other than the subordinated debentures), notes, bankers&#146; acceptances or other corporate
debt securities or similar instruments issued by Consumers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>capital lease obligations of Consumers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>obligations of Consumers incurred for deferring the purchase price of property, with
respect to conditional sales, and under any title retention agreement (but excluding trade
accounts payable arising in the ordinary course of business);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>obligations of Consumers with respect to letters of credit;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all indebtedness of others of the type referred to in the four preceding clauses assumed
by or guaranteed in any manner by Consumers or in effect guaranteed by Consumers; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>renewals, extensions or refundings of any of the indebtedness referred to in the
preceding three clauses unless, in the case of any particular indebtedness, renewal,
extension or refunding, under the express provisions of the instrument creating or
evidencing the same or the assumption or guarantee of the same, or pursuant to which the
same is outstanding, such indebtedness or such renewal, extension or refunding thereof is
not superior in right of payment to the subordinated debt securities.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Certain Covenants</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If debt securities are issued to a trust or a trustee of such trust in connection with the
issuance of trust preferred securities of that trust, Consumers will covenant that it will not (1)
declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of Consumers&#146; capital stock or (2)&nbsp;make any payment of
principal, interest or premium, if any, on or repay or repurchase or redeem any debt securities
(including guarantees of indebtedness for money borrowed) of Consumers that rank equal (in the case
of subordinated debentures) with or junior (in the case of senior and subordinated debentures) to
that debt security (other than (a)&nbsp;any dividend, redemption, liquidation, interest, principal or
guarantee payment by Consumers where the payment is made by way of securities (including capital
stock) that rank equal with or junior to the securities on which such dividend, redemption,
interest, principal or guarantee payment is being made and (b)&nbsp;payments under Consumers&#146; guarantees
of trust securities), if at such time (1)&nbsp;there shall have occurred any event of which Consumers
has actual knowledge (a)&nbsp;that with the giving of notice or the lapse of time, or both, would
constitute an event of default under the indentures and (b)&nbsp;in respect of which Consumers shall not
have taken reasonable steps to cure, (2)&nbsp;Consumers shall be in default with respect to its payment
of any obligations under the guarantees or (3)&nbsp;Consumers will have given notice of its selection of
an extension period as provided in the indentures with respect to the debt securities and will not
have rescinded such notice, or such extension period, or any extension thereof, shall be
continuing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumers will also covenant:
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->17<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) to maintain directly or indirectly 100% ownership of the common securities, provided
that certain successors that are permitted pursuant to the indentures may succeed to Consumers&#146;
ownership of the common securities;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) not to voluntarily dissolve, wind-up or liquidate the trust, except:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) in connection with a distribution of the debt securities to the holders of the trust
preferred securities in liquidation of such trust; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) in connection with certain mergers, consolidations or amalgamations permitted by the
amended and restated Declaration of Trust; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) to use its reasonable efforts, consistent with the terms and provisions of the amended
and restated Declaration of Trust, to cause such trust to remain classified as a grantor trust
and not as an association taxable as a corporation for United States federal income tax purposes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Events of Default</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The subordinated debt indenture provides that events of default regarding any series of
subordinated debentures will be:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>failure to pay any required interest on any subordinated debentures of such series for 30
days;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>failure to pay principal other than a scheduled installment payment or premium, if any,
on any subordinated note of such series when due;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>failure to make any required scheduled installment payment on subordinated notes of such
series;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>failure to perform for 60&nbsp;days after notice any other covenant in the subordinated debt
indenture other than a covenant included in the subordinated debt indenture solely for the
benefit of a series of subordinated debentures other than such series;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>certain events of bankruptcy or insolvency, whether voluntary or not; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>if subordinated debentures are issued by a trust, such trust is voluntarily or
involuntarily dissolved, wound-up or terminated, except in connection with the distribution
of subordinated debentures to the holders of the common securities and the trust preferred
securities in liquidation of the trust, the redemption of all outstanding trust securities
of the trust and certain mergers, consolidation or amalgamations permitted by the
declaration of that trust.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If an event of default regarding subordinated debentures of any series issued should occur and
be continuing, either the subordinated note trustee or the holders of 25% in the principal amount
of outstanding subordinated debentures of such series may declare each subordinated note of that
series due and payable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Holders of a majority in principal amount of the outstanding subordinated debentures of any
series will be entitled to control certain actions of the subordinated note trustee and to waive
past defaults regarding such series. The trustee generally will not be requested, ordered or
directed by any of the holders of subordinated debentures, unless one or more of such holders shall
have offered to the trustee reasonable security or indemnity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Before any holder of any series of subordinated debentures may institute action for any
remedy, except payment on such holder&#146;s subordinated debentures when due, the holders of not less
than 25% in principal amount of the subordinated debentures of that series outstanding must request
the subordinated note trustee to take action. Holders must also offer and give the satisfactory
security and indemnity against liabilities incurred by the trustee for taking such action.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumers is required to annually furnish the subordinated note trustee a statement as to
Consumers&#146; compliance with all conditions and covenants under the subordinated debt indenture. The
subordinated debt indenture provides that the subordinated note trustee may withhold notice to the
holders of the subordinated debentures of any series of any default affecting such series, except
payment on holders&#146; subordinated debentures when due, if it considers withholding notice to be in
the interests of the holders of the subordinated debentures of such series.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->18<!-- /Folio -->
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Consolidation, Merger or Sale of Assets</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The subordinated debt indenture provides that Consumers may consolidate with or merge into, or
sell, lease or convey its property as an entirety or substantially as an entirety to, any other
corporation if the new corporation assumes the obligations of Consumers under the subordinated
debentures and the subordinated debt indenture and is organized and existing under the laws of the
United States of America, any U.S. state or the District of Columbia.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Modification of the Indenture</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The subordinated debt indenture permits Consumers and the subordinated note trustee to enter
into supplemental indentures without the consent of the holders of the subordinated debentures to
establish the form and terms of any series of securities under the subordinated debt indentures.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The subordinated debt indenture also permits Consumers and the subordinated note trustee, with
the consent of the holders of a majority in total principal amount of the subordinated debentures
of all series then outstanding and affected (voting as one class), to change in any manner the
provisions of the subordinated debt indenture or modify in any manner the rights of the holders of
the subordinated debentures of each such affected series. Consumers and the relevant trustee may
not, without the consent of the holder of each subordinated debenture affected, enter into any
supplemental indenture to:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>change the time of payment of the principal;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>reduce the principal amount of such subordinated debentures;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>reduce the rate or change the time of payment of any interest on such subordinated
debentures; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>impair the right to institute suit for the enforcement of any payment on any subordinated
debentures when due.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, no such modification may reduce the percentage in principal amount of the
subordinated debentures of the affected series, the consent of whose holders is required for any
such modification or for any waiver provided for in the subordinated debt indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to the acceleration of the maturity of any subordinated debentures, the holders, voting
as one class, of a majority in total principal amount of the subordinated debentures with respect
to which a default or event of default has occurred and is continuing, may, on behalf of the
holders of all such affected subordinated debentures, waive any past default or event of default
and its consequences, except a default or an event of default in respect of a covenant or provision
of the applicable indenture or of any subordinated debenture which cannot be modified or amended
without the consent of the holder of each subordinated debenture affected.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Defeasance, Covenant Defeasance and Discharge</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The subordinated debt indenture provides that, at the option of Consumers, Consumers will be
discharged from all obligations in respect of the subordinated debentures of a particular series
then outstanding (except for certain obligations to register the transfer of or exchange the
subordinated debentures of such series, to replace stolen, lost or mutilated subordinated
debentures of such series, to maintain paying agencies and to maintain the trust described below).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If Consumers in each case irrevocably deposits in trust with the relevant trustee money and/or
securities backed by the full faith and credit of the United States which, through the payment of
the principal thereof and the interest thereon in accordance with their terms, will provide money
in an amount sufficient to pay all the principal and interest on the subordinated debentures of
such series on the stated maturities of such subordinated debentures in accordance with the terms
thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To exercise this option, Consumers is required to deliver to the relevant trustee an opinion
of independent counsel to the effect that the exercise of such option would not cause the holders
of the subordinated debentures of such series to recognize income, gain or loss for United States
federal income tax purposes as a result of such defeasance, and such holders will be subject to
United States federal income tax on the same amounts, in the same manner and at the same times as
would have been the case if such defeasance had not occurred.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Trust Preferred Securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each trust may issue, on one or more occasion, trust preferred securities having terms
described in the applicable prospectus supplement. The amended and restated Declaration of Trust of
each trust will authorize the establishment of no more than one series
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->19<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">of trust preferred securities, having such terms, including distributions, redemption, voting,
liquidation rights and such other preferred, deferred or other special rights or such rights or
restrictions as shall be set forth therein or otherwise established by the trustees pursuant
thereto. Reference is made to the prospectus supplement relating to the trust preferred securities
for specific terms, including:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the distinctive designation and the number of trust preferred securities to be offered
which will represent undivided beneficial interests in the assets of the trust;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the annual distribution rate and the dates or date upon which such distributions will
be paid, provided, however distributions on the trust preferred securities will be paid
quarterly in arrears to holders of trust preferred securities as of a record date on which
the trust preferred securities are outstanding;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>whether distributions on trust preferred securities would be deferred during any
deferral of interest payments on the debt securities, provided, however that no such
deferral, including extensions, if any, may exceed 20 consecutive quarters nor extend
beyond the stated maturity date of the debt securities, and at the end of any such
deferrals, Consumers will make all interest payments then accrued or deferred and unpaid
(including any compounded interest);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the amount of any liquidation preference;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the obligation, if any, of the trust to redeem trust preferred securities through the
exercise of Consumers of an option on the corresponding debt securities and the price or
prices at which, the period or periods within which and the terms and conditions upon which
trust preferred securities will be purchased or redeemed, in whole or in part, under such
obligation;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the period or periods within which and the terms and conditions, if any, including the
price or prices or the rate or rates of conversion or exchange and the terms and conditions
of any adjustments, upon which the trust preferred securities shall be convertible or
exchangeable at the option of the holder of the trust preferred securities into other
property or cash;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the voting rights, if any, of the trust preferred securities in addition to those
required by law and in the amended and restated Declaration of Trust, or set forth under a
Consumers guarantee (as defined below);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the additional payments, if any, which the trust will pay as a distribution as
necessary so that the net amounts reserved by the trust and distributable to the holders of
the trust preferred securities, after all taxes, duties, assessments or governmental
charges of whatever nature (other than withholding taxes) have been paid will not be less
than the amount that would have been reserved and distributed by the trust, and the amount
the holders of the trust preferred securities would have reserved, had no such taxes,
duties, assessments or governmental charges been imposed;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the terms and conditions, if any, upon which the debt securities may be distributed to
holders of trust preferred securities; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any other relative rights, powers, preferences, privileges, limitations or restrictions
of the trust preferred securities not inconsistent with the amended and restated
Declaration of Trust or applicable law.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All trust preferred securities offered hereby will be irrevocably guaranteed by Consumers, on
a senior or subordinated basis, as applicable, and to the extent set forth below under &#147;The
Guarantees.&#148; Any applicable federal income tax considerations applicable to any offering of the
trust preferred securities will be described in the prospectus supplement relating thereto. The
total number of trust preferred securities that the trust shall have authority to issue will be
pursuant to the terms of the amended and restated Declaration of Trust.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Effect of Obligations Under the Debt Securities and the Guarantees</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As set forth in the amended and restated Declaration of Trust, the sole purpose of the trusts
are to issue the common securities and the trust preferred securities evidencing undivided
beneficial interests in the assets of each of the trusts, and to invest the proceeds from such
issuance and sale to acquire directly the debt securities from Consumers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As long as payments of interest and other payments are made when due on the debt securities,
such payments will be sufficient to cover distributions and payments due on the common securities
and the trust preferred securities because of the following factors:
</DIV>

<DIV style="margin-top: 6pt">




<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the total principal amount of debt securities will be equal to the sums of the total
stated liquidation amount of the common securities and the trust preferred securities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the interest rate and the interest and other payment dates on the debt securities will
match the distribution rate and distribution and other payment dates for the common
securities and the trust preferred securities;</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->20<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Consumers will pay all, and each trust shall not be obligated to pay, directly or
indirectly, all, its costs, expenses, debt and obligations (other than with respect to the
common securities and the trust preferred securities); and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the amended and restated Declaration of Trust further provides that Consumers&#146; trustees
will not take or cause or permit the trust to, among other things, engage in any activity
that is not consistent with the purposes of the trust.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments of distributions (to the extent funds for distributions are available) and other
payments due on the trust preferred securities (to the extent funds for other payments are
available) are guaranteed by Consumers as and to the extent discussed under &#147;The Guarantees&#148; below.
If Consumers does not make interest payments on the debt securities purchased by the trust, it is
expected that the trusts will not have sufficient funds to pay distributions on the trust preferred
securities. The Consumers guarantees do not apply to any payment of distributions unless and until
the trusts have sufficient funds for the payment of distributions and other payments on the trust
preferred securities only if and to the extent that Consumers has made a payment of interest or
principal on the debt securities held by the trusts as their sole asset. The Consumers guarantees,
when taken together with Consumers&#146; obligations under the debt securities and the related indenture
and its obligations under the applicable amended and restated Declaration of Trust, including its
obligations to pay costs, expenses, debts and liabilities of the trust (other than with respect to
the common securities and the trust preferred securities), provide a full and unconditional
guarantee of amounts on the trust preferred securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If Consumers fails to make interest or other payments on the debt securities when due (taking
account of any extension period), the applicable amended and restated Declaration of Trust provides
a mechanism whereby the holders of the trust preferred securities may direct a property trustee to
enforce its rights under the debt securities. If a property trustee fails to enforce its rights
under the debt securities, a holder of trust preferred securities may, to the fullest extent
permitted by applicable law, institute a legal proceeding against Consumers to enforce a property
trustee&#146;s rights under the debt securities without first instituting any legal proceeding against a
property trustee or any other person or entity. Notwithstanding the foregoing, if an event of
default has occurred and is continuing under the applicable amended and restated Declaration of
Trust, and such event is attributable to the failure of Consumers to pay interest or principal on
the debt securities on the date such interest or principal is otherwise payable (or in the case of
redemption on the redemption date), then a holder of trust preferred securities may institute legal
proceedings directly against Consumers to obtain payment. If Consumers fails to make payments under
the guarantees, the guarantees provide a mechanism whereby the holders of the trust preferred
securities may direct a guarantee trustee to enforce its rights thereunder. Any holder of trust
preferred securities may institute a legal proceeding directly against Consumers to enforce a
guarantee trustee&#146;s rights under a guarantee without first instituting a legal proceeding against
the trust, the guarantee trustee, or any other person or entity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>The Guarantees</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Set forth below is a summary of information concerning the guarantees that will be executed
and delivered by Consumers for the benefit of the holders, from time to time, of the trust
preferred securities. Each guarantee will be qualified as an indenture under the Trust Indenture
Act of 1939. The Bank of New York will act as indenture trustee under the guarantees for the
purpose of compliance with the provisions of the Trust Indenture Act of 1939. This summary does not
purport to be complete and is subject in all respects to the provisions of, and is qualified in its
entirety by reference to, the guarantees, which are filed as an exhibit to the registration
statement of which this prospectus forms a part.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>General</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumers will irrevocably agree to pay in full, on a senior or subordinated basis, as
applicable, to the extent set forth herein, the guarantee payments (as described below) to the
holders of the trust preferred securities, as and when due, regardless of any defense, right of
set-off or counterclaim that the trust may have or assert other than the defense of payment. The
following payments with respect to the trust preferred securities, to the extent not paid by or on
behalf of the trust, will be subject to a guarantee by Consumers of:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) any accumulated and unpaid distributions required to be paid on the trust preferred
securities, to the extent that the trust has funds on hand available therefor at such time;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the redemption price with respect to any trust preferred securities called for
redemption to the extent that the trust has funds on hand available therefor at such time; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) upon a voluntary or involuntary dissolution, winding up or liquidation of the trust
(unless the debt securities are distributed to holders of the trust preferred securities), the
lesser of (a)&nbsp;the liquidation distribution, to the extent that the trust has funds on hand
available for the distribution at such time, and (b)&nbsp;the amount of assets of the trust remaining
available for distribution to holders of trust preferred securities.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->21<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumers&#146; obligation to make a guarantee payment may be satisfied by direct payment of the
required amounts of Consumers to the holders of the trust preferred securities or by causing the
trust to pay such amount to such holders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Consumers guarantees will be irrevocable guarantees, on a senior or subordinated basis, as
applicable, of the trust&#146;s obligations under the trust preferred securities, but will apply only to
the extent that the trust has funds sufficient to make such payments, and are not guarantees of
collection. If Consumers does not make interest payments on the debt securities held by the trust,
the trust will not be able to pay distributions on the trust preferred securities and will not have
funds legally available therefor.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumers has, through the guarantees, the applicable amended and restated Declaration of
Trust, the senior notes, the subordinated debentures, and the indentures, taken together, fully,
irrevocably and unconditionally guaranteed all of the trust&#146;s obligations under the trust preferred
securities. No single document standing alone or operating in conjunction with fewer than all of
the other documents constitutes such guarantee. It is only the combined operation of these
documents that has the effect of providing a full, irrevocable and unconditional guarantee of the
trust&#146;s obligations under the trust preferred securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumers has also agreed separately to irrevocably and unconditionally guarantee the
obligations of the trust with respect to the common securities to the same extent as the guarantees
of the preferred securities, except that upon the occurrence and during the continuation of a
amended and restated Declaration of Trust event of default, holders of trust preferred securities
shall have priority over holders of common securities with respect to distributions and payments on
liquidation, redemption or otherwise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Certain Covenants of Consumers</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumers will also covenant that it will not:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make
a liquidation payment with respect to, any of Consumers&#146; capital stock; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) make any payment of principal of, or interest or premium, if any, on, or repay or
repurchase or redeem any debt securities (including guarantees of indebtedness for money
borrowed) of Consumers that rank equal (in the case of subordinated debentures with or junior in
the case of the senior and subordinated debentures) to the debt securities (other than (a)&nbsp;any
dividend, redemption, liquidation, interest, principal or guarantee payment by Consumers where
the payment is made by way of securities (including capital stock) that rank equal with or junior
to the securities on which such dividend, redemption, interest, principal or guarantee payment is
being made, (b)&nbsp;payments under the Consumers guarantees of the trust securities, (c)&nbsp;as a result
of a reclassification of Consumers&#146; capital stock or the exchange or conversion of one series or
class of Consumers&#146; capital stock for another series or class of Consumers&#146; capital stock and (d)
the purchase of fractional interests in shares of Consumers&#146; capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being converted or
exchanged) if at such time (1)&nbsp;there shall have occurred any event of which Consumers has actual
knowledge that (a)&nbsp;with the giving of notice or the lapse of time, or both, would constitute a
event of default and (b)&nbsp;in respect of which Consumers shall not have taken reasonable steps to
cure, (2)&nbsp;Consumers shall be in default with respect to its payment of any obligations under the
guarantee or (3)&nbsp;Consumers shall have given notice of its selection of an extension period as
provided in the indentures with respect to the debt securities and shall not have rescinded such
notice, or such extension period, or any extension thereof, shall be continuing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumers also will covenant to:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) maintain directly or indirectly 100% ownership of the common securities, provided that
certain successors, which are permitted pursuant to the indentures, may succeed to Consumers&#146;
ownership of the common securities;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) not voluntarily dissolve, wind-up or liquidate the trust, except:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>in connection with a distribution of the debt securities to the holders of the trust
preferred securities in liquidation of the trust; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>in connection with certain mergers, consolidations or amalgamations permitted by the
amended and restated Declaration of Trust; and</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) use its reasonable efforts, consistent with the terms and provisions of the applicable
amended and restated Declaration of Trust, to cause the trust to remain classified as a grantor
trust and not as an association taxable as a corporation for United States federal income tax
purposes.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->22<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Amendments and Assignment</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except with respect to any changes which do not materially adversely affect the rights of
holders of the trust preferred securities (in which case no vote will be required), the Consumers
guarantees of the trust preferred securities may not be amended without the prior approval of the
holders of a majority in total liquidation amount of such outstanding trust preferred securities.
All guarantees and agreements contained in the guarantees shall bind the successors, assigns,
receivers, trustees and representatives of Consumers and shall inure to the benefit of the holders
of the trust preferred securities then outstanding.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Termination of the Guarantees</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Consumers guarantees of the trust preferred securities will terminate and be of no further
force and effect upon full payment of the redemption price of the trust preferred securities, upon
full payment of the amounts payable upon liquidation of the trust or upon distribution of the debt
securities to the holders of the trust preferred securities in exchange for all of the trust
preferred securities. The guarantees will continue to be effective or will be reinstated, as the
case may be, if at any time any holder of trust preferred securities must restore payment of any
sums paid under such trust preferred securities or the guarantees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Events of Default</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An event of default under a Consumers guarantee of the trust preferred securities will occur
upon the failure of Consumers to perform any of its payment or other obligations thereunder. The
holders of a majority in total liquidation amount of the trust preferred securities have the right
to direct the time, method and place of conducting any proceeding for any remedy available to a
guarantee trustee in respect of a guarantee or to direct the exercise of any trust or power
conferred upon a guarantee trustee under the guarantees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a guarantee trustee fails to enforce a Consumers guarantee of the trust preferred
securities, any holder of the trust preferred securities may institute a legal proceeding directly
against Consumers to enforce its rights under such guarantee without first instituting a legal
proceeding against the trust, the guarantee trustee or any other person or entity. In addition, any
record holder of trust preferred securities shall have the right, which is absolute and
unconditional, to proceed directly against Consumers to obtain guarantee payments, without first
waiting to determine if the guarantee trustee has enforced a guarantee or instituting a legal
proceeding against the trust, the guarantee trustee or any other person or entity. Consumers has
waived any right or remedy to require that any action be brought just against the trust, or any
other person or entity before proceeding directly against Consumers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Status of the Guarantees</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Consumers guarantee of the trust preferred securities will constitute unsecured
obligations of Consumers and will rank:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) equal to or subordinate and junior in right of payment to all other liabilities of
Consumers, as applicable;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) equal with the most senior preferred stock now or hereafter issued by Consumers and with
any guarantee now or hereafter entered into by Consumers in respect of any preferred or
preference stock of any affiliate of Consumers; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) senior to Consumers&#146; common stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Consumers guarantee of the trust preferred securities will constitute a guarantee of
payment and not of collection (i.e., the guaranteed party may institute a legal proceeding directly
against the guarantor to enforce its rights under the guarantee without first instituting a legal
proceeding against any other person or entity). The guarantees will be held for the benefit of the
holders of the trust preferred securities. The guarantees will not be discharged except by payment
of the guarantee payments in full to the extent not paid by the trust or upon distribution of the
debt securities to the holders of the trust preferred securities. The guarantees do not place a
limitation on the amount of additional indebtedness that may be incurred by Consumers.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->23<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="123"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PLAN OF DISTRIBUTION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumers and/or the trusts may sell the offered securities:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) through the solicitation of proposals of underwriters or dealers to purchase the offered
securities;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) through underwriters or dealers on a negotiated basis;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) directly to a limited number of purchasers or to a single purchaser; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) through agents.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The prospectus supplement with respect to any offered securities will set forth the terms of
such offering, including: the name or names of any underwriters, dealers or agents; the purchase
price of the offered securities and the proceeds to Consumers and/or the trust from such sale; any
underwriting discounts and commissions and other items constituting underwriters&#146; compensation; any
initial public offering price and any discounts or concessions allowed or reallowed or paid to
dealers; and any securities exchange on which such offered securities may be listed. Any initial
public offering price, discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If underwriters are used in the sale, the offered securities will be acquired by the
underwriters for their own account and may be resold on one or more occasions in one or more
transactions, including negotiated transactions, at a fixed public offering price or at varying
prices determined at the time of sale. The offered securities may be offered to the public either
through underwriting syndicates represented by one or more managing underwriters or directly by one
or more firms acting as underwriters. The underwriter or underwriters with respect to a particular
underwritten offering offered securities will be named in the prospectus supplement relating to
such offering and, if an underwriting syndicate is used, the managing underwriter or underwriters
will be set forth on the cover of such prospectus supplement. Unless otherwise set forth in the
prospectus supplement relating thereto, the obligations of the underwriters to purchase the offered
securities will be subject to certain conditions precedent, and the underwriters will be obligated
to purchase all the offered securities if any are purchased.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If dealers are utilized in the sale of offered securities, Consumers and/or the trusts will
sell such offered securities to the dealers as principals. The dealers may then resell such offered
securities to the public at varying prices to be determined by such dealers at the time of resale.
The names of the dealers and the terms of the transaction will be set forth in the prospectus
supplement relating thereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The offered securities may be sold directly by Consumers and/or the trusts or through agents
designated by Consumers and/or the trusts from time to time. Any agent involved in the offer or
sale of the offered securities in respect to which this prospectus is delivered will be named, and
any commissions payable by Consumers and/or the trusts to such agent will be set forth, in the
prospectus supplement relating thereto. Unless otherwise indicated in the prospectus supplement,
any such agent will be acting on a best efforts basis for the period of its appointment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The offered securities may be sold directly by Consumers and/or the trusts to institutional
investors or others, who may be deemed to be underwriters within the meaning of the Securities Act
of 1933, as amended (the &#147;Securities Act&#148;) with respect to any resale thereof. The terms of any
such sales will be described in the prospectus supplement relating thereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are currently contemplating issuing up to $250&nbsp;million of new first mortgage bonds in an
underwritten offering shortly after the registration statement containing this prospectus is
declared effective by the SEC. The general terms of the first mortgage bonds are described in this
prospectus under &#147;Description of Securities &#151; First Mortgage Bonds.&#148; We have not finally
determined the timing or terms of such an offering. Total underwriters&#146; compensation to be paid by
us is not expected to exceed 0.875% of the principal amount of any new first mortgage bonds to be
sold. The interest rate is expected to be a fixed rate determined through negotiation with the
underwriters based on market conditions at the time of the offering. Maturity of the new first
mortgage bonds would be in the range of 5 to 35&nbsp;years depending on market conditions. We expect
that the use of proceeds from this offering will be for refinancing our existing debt (including
expenses). Other terms have not been determined at this time, but will be reflected in a
prospectus supplement that will be filed with the SEC if and when we decide to proceed with any
such offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Agents, dealers and underwriters may be entitled under agreements with Consumers and/or the
trusts to indemnification by Consumers and/or the trust against certain civil liabilities,
including liabilities under the Securities Act, or to contribution with respect to payments which
such agents, dealers or underwriters may be required to make in respect thereof. Agents, dealers
and underwriters may be customers of, engage in transactions with, or perform services for
Consumers and/or the trust in the ordinary course of business.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->24<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The offered securities may also be offered and sold, if so indicated in the applicable
prospectus supplement, in connection with a remarketing upon their purchase, in accordance with a
redemption or repayment pursuant to their terms, or otherwise, by one or more firms (&#147;remarketing
firms&#148;), acting as principals for their own accounts or as agents for Consumers and/or the trusts.
Any remarketing firm will be identified and the terms of its agreement, if any, with its
compensation will be described in the applicable prospectus supplement. Remarketing firms may be
deemed to be underwriters, as such term is defined in the Securities Act, in connection with the
offered securities remarketed thereby. Remarketing firms may be entitled under agreements which may
be entered into with Consumers and/or the trusts to indemnification or contribution by Consumers
and/or the trusts against certain civil liabilities, including liabilities under the Securities
Act, and may be customers of, engage in transactions or perform services for Consumers and its
subsidiaries in the ordinary course of business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The offered securities may or may not be listed on a national securities exchange. Reference
is made to the applicable prospectus supplement with regard to such matter. No assurance can be
given that there will be a market for any of the offered securities.
</DIV>
<DIV align="left">
<A name="124"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>LEGAL MATTERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Opinions as to the legality of certain of the offered securities will be rendered for
Consumers by Robert C. Shrosbree, Esq., Assistant General Counsel for CMS Energy Corporation, the
parent of Consumers. Certain matters of Delaware law relating to the validity of the trust
preferred securities will be passed upon on behalf of the trusts by Skadden, Arps, Slate, Meagher &#038;
Flom LLP, special Delaware counsel to the trusts. Certain United States federal income taxation
matters may be passed upon for Consumers and the trust by either Theodore Vogel, Vice President and
Tax Counsel for CMS Energy Corporation, or by special tax counsel to Consumers and of the trust,
who will be named in the applicable prospectus supplement. Certain legal matters with respect to
offered securities will be passed upon by counsel for any underwriters, dealers or agents, each of
whom will be named in the related prospectus supplement.
</DIV>
<DIV align="left">
<A name="125"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXPERTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The consolidated financial statements and schedule of Consumers appearing in Consumers&#146; Annual
Report (Form 10-K/A) for the year ended December&nbsp;31, 2003 have been audited by Ernst &#038; Young LLP,
independent registered public accounting firm, as set forth in their report thereon included
therein and incorporated herein by reference, and are based in part on the reports of
PricewaterhouseCoopers LLP for 2003 and 2002, independent registered public accounting firm, and
Arthur Andersen LLP (who have ceased operations) for 2001, independent accountants, for the MCV
Partnership. Such consolidated financial statements and schedule are incorporated herein by
reference in reliance upon such reports given on the authority of such firms as experts in
accounting and auditing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The consolidated financial statements of the MCV Partnership as of and for the years ended
December&nbsp;31, 2003 and 2002, not separately presented or incorporated by reference in this
prospectus, have been audited by PricewaterhouseCoopers LLP, independent registered public
accounting firm, as stated in their report appearing in Consumers&#146; Annual Report on Form 10-K/A for
the year ended December&nbsp;31, 2003, which report is incorporated by reference herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The audited consolidated financial statements of the MCV Partnership for the year ended
December&nbsp;31, 2001, not separately presented or incorporated by reference in this prospectus, have
been audited by Arthur Andersen LLP, independent accountants. Arthur Andersen LLP has not consented
to the inclusion of their report on the financial statements of the MCV Partnership for the year
ended December&nbsp;31, 2001 in this prospectus, and we have dispensed with the requirement to file
their consent in reliance upon Rule&nbsp;437a under the Securities Act. Because Arthur Andersen LLP has
not consented to the incorporation by reference of their report in this prospectus, you will not be
able to recover against Arthur Andersen LLP under Section&nbsp;11 of the Securities Act for any untrue
statements of a material fact contained in the financial statements audited by Arthur Andersen LLP
or any omissions to state a material fact required to be stated therein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Future consolidated financial statements of Consumers and the reports thereon of Ernst &#038; Young
LLP also will be incorporated by reference in this prospectus in reliance upon the authority of
that firm as experts in giving those reports to the extent that said firm has audited said
consolidated financial statements and consented to the use of their reports thereon.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->25<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>





<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>$250,000,000</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 12pt"><IMG src="k24642b2k2464202.gif" alt="(CONSUMERS ENGERGY LOGO)">

</DIV>

<DIV align="Center" style="font-size: 12pt; margin-top: 12pt"><B>Consumers Energy Company</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>5.65%
First Mortgage Bonds due 2018</B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PROSPECTUS SUPPLEMENT</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 18pt"><B>Barclays Capital</B><BR>
<B>BNP PARIBAS</B><BR>
<B>Scotia Capital</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 18pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>RBS Greenwich Capital<BR>
Wedbush Morgan Securities Inc.</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Comerica Securities<BR>
Wells Fargo Securities<BR>
The Williams Capital Group, L.P.</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>March
10, 2008</B>

</DIV>

<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>














<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>



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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
