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Asset Retirement Obligations | 12 Months Ended
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Dec. 31, 2012
Asset Retirement Obligations | 11:ASSET RETIREMENT OBLIGATIONS CMS Energy and Consumers record the fair value of the cost to remove assets at the end of their useful lives, if there is a legal obligation to remove them. No market risk premiums were included in CMS Energy’s and Consumers’ ARO fair value estimates since reasonable estimates could not be made. If a five percent market risk premium were assumed, CMS Energy’s and Consumers’ ARO liabilities at December 31, 2012 would increase by $16 million and at December 31, 2011 would increase by $13 million. In 2012, Consumers updated the ARO for coal ash disposal areas to reflect a revised estimate of future obligations, and recorded the initial estimate for the Lake Winds® Energy Park ARO. If a reasonable estimate of fair value cannot be made in the period in which the ARO is incurred, such as for assets with indeterminate lives, the liability is recognized when a reasonable estimate of fair value can be made. CMS Energy and Consumers have not recorded liabilities for assets that have insignificant cumulative disposal costs, such as substation batteries. Presented below are the categories of assets that CMS Energy and Consumers have legal obligations to remove at the end of their useful lives and for which they have an ARO liability recorded:
| In-Service |  |
Company and ARO Description | Date | Long-Lived Assets |
CMS Energy, including Consumers |  |  |
Closure of gas treating plant and gas wells | Various | Gas transmission and storage |
Closure of coal ash disposal areas | Various | Generating plants coal ash areas |
Closure of wells at gas storage fields | Various | Gas storage fields |
Indoor gas services equipment relocations | Various | Gas meters located inside structures |
Asbestos abatement | 1973 | Electric and gas utility plant |
Gas distribution cut, purge, and cap | Various | Gas distribution mains and services |
Closure of wind farm | 2012 | Wind generation facilities |
Consumers |  |  |
Closure of coal ash disposal areas | Various | Generating plants coal ash areas |
Closure of wells at gas storage fields | Various | Gas storage fields |
Indoor gas services equipment relocations | Various | Gas meters located inside structures |
Asbestos abatement | 1973 | Electric and gas utility plant |
Gas distribution cut, purge, and cap | Various | Gas distribution mains and services |
Closure of wind farm | 2012 | Wind generation facilities |
No assets have been restricted for purposes of settling AROs. Presented in the following tables are the changes in CMS Energy’s and Consumers’ ARO liabilities:
In Millions
| ARO |  |  |  |  |  |  |  |  |  |  |  |  | ARO |
| Liability |  |  |  |  |  |  |  |  |  | Cash flow | Liability |
Company and ARO Description | 12/31/2011 | Incurred | Settled1 | Accretion | Revisions | 12/31/2012 |
CMS Energy, including Consumers |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gas treating plant and gas wells |  | $ | 1 |  | $ | - |  | $ | - |  | $ | - |  | $ | - |  | $ | 1 |
Consumers |  |  | 253 |  |  | 7 |  |  | (8) |  |  | 19 |  |  | 40 |  |  | 311 |
Total CMS Energy |  | $ | 254 |  | $ | 7 |  | $ | (8) |  | $ | 19 |  | $ | 40 |  | $ | 312 |
Consumers |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Coal ash disposal areas |  | $ | 70 |  | $ | - |  | $ | (3) |  | $ | 7 |  | $ | 40 |  | $ | 114 |
Wells at gas storage fields |  |  | 1 |  |  | - |  |  | (1) |  |  | - |  |  | - |  |  | - |
Asbestos abatement |  |  | 42 |  |  | - |  |  | (1) |  |  | 2 |  |  | - |  |  | 43 |
Gas distribution cut, purge, and cap |  |  | 140 |  |  | 4 |  |  | (3) |  |  | 10 |  |  | - |  |  | 151 |
Wind farm |  |  | - |  |  | 3 |  |  | - |  |  | - |  |  | - |  |  | 3 |
Total Consumers |  | $ | 253 |  | $ | 7 |  | $ | (8) |  | $ | 19 |  | $ | 40 |  | $ | 311 |
In Millions
| ARO |  |  |  |  |  |  |  |  |  |  |  |  | ARO |
| Liability |  |  |  |  |  |  |  |  |  | Cash flow | Liability |
Company and ARO Description | 12/31/2010 | Incurred | Settled1 | Accretion | Revisions | 12/31/2011 |
CMS Energy, including Consumers |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gas treating plant and gas wells |  | $ | 1 |  | $ | - |  | $ | - |  | $ | - |  | $ | - |  | $ | 1 |
Consumers |  |  | 244 |  |  | (2) |  |  | (7) |  |  | 18 |  |  | - |  |  | 253 |
Total CMS Energy |  | $ | 245 |  | $ | (2) |  | $ | (7) |  | $ | 18 |  | $ | - |  | $ | 254 |
Consumers |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Coal ash disposal areas |  | $ | 66 |  | $ | - |  | $ | (2) |  | $ | 6 |  | $ | - |  | $ | 70 |
Wells at gas storage fields |  |  | 1 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 1 |
Indoor gas services relocations |  |  | 1 |  |  | - |  |  | (1) |  |  | - |  |  | - |  |  | - |
Asbestos abatement |  |  | 40 |  |  | - |  |  | (1) |  |  | 3 |  |  | - |  |  | 42 |
Gas distribution cut, purge, and cap |  |  | 136 |  |  | (2) |  |  | (3) |  |  | 9 |  |  | - |  |  | 140 |
Total Consumers |  | $ | 244 |  | $ | (2) |  | $ | (7) |  | $ | 18 |  | $ | - |  | $ | 253 |
1 Cash payments of $8 million in 2012 and $7 million in 2011 were included in other current and non-current assets and liabilities as a component of net cash provided by operating activities in CMS Energy’s and Consumers’ consolidated statements of cash flow.
Consumers Energy Company [Member] |
Asset Retirement Obligations | 11:ASSET RETIREMENT OBLIGATIONS CMS Energy and Consumers record the fair value of the cost to remove assets at the end of their useful lives, if there is a legal obligation to remove them. No market risk premiums were included in CMS Energy’s and Consumers’ ARO fair value estimates since reasonable estimates could not be made. If a five percent market risk premium were assumed, CMS Energy’s and Consumers’ ARO liabilities at December 31, 2012 would increase by $16 million and at December 31, 2011 would increase by $13 million. In 2012, Consumers updated the ARO for coal ash disposal areas to reflect a revised estimate of future obligations, and recorded the initial estimate for the Lake Winds® Energy Park ARO. If a reasonable estimate of fair value cannot be made in the period in which the ARO is incurred, such as for assets with indeterminate lives, the liability is recognized when a reasonable estimate of fair value can be made. CMS Energy and Consumers have not recorded liabilities for assets that have insignificant cumulative disposal costs, such as substation batteries. Presented below are the categories of assets that CMS Energy and Consumers have legal obligations to remove at the end of their useful lives and for which they have an ARO liability recorded:
| In-Service |  |
Company and ARO Description | Date | Long-Lived Assets |
CMS Energy, including Consumers |  |  |
Closure of gas treating plant and gas wells | Various | Gas transmission and storage |
Closure of coal ash disposal areas | Various | Generating plants coal ash areas |
Closure of wells at gas storage fields | Various | Gas storage fields |
Indoor gas services equipment relocations | Various | Gas meters located inside structures |
Asbestos abatement | 1973 | Electric and gas utility plant |
Gas distribution cut, purge, and cap | Various | Gas distribution mains and services |
Closure of wind farm | 2012 | Wind generation facilities |
Consumers |  |  |
Closure of coal ash disposal areas | Various | Generating plants coal ash areas |
Closure of wells at gas storage fields | Various | Gas storage fields |
Indoor gas services equipment relocations | Various | Gas meters located inside structures |
Asbestos abatement | 1973 | Electric and gas utility plant |
Gas distribution cut, purge, and cap | Various | Gas distribution mains and services |
Closure of wind farm | 2012 | Wind generation facilities |
No assets have been restricted for purposes of settling AROs. Presented in the following tables are the changes in CMS Energy’s and Consumers’ ARO liabilities:
In Millions
| ARO |  |  |  |  |  |  |  |  |  |  |  |  | ARO |
| Liability |  |  |  |  |  |  |  |  |  | Cash flow | Liability |
Company and ARO Description | 12/31/2011 | Incurred | Settled1 | Accretion | Revisions | 12/31/2012 |
CMS Energy, including Consumers |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gas treating plant and gas wells |  | $ | 1 |  | $ | - |  | $ | - |  | $ | - |  | $ | - |  | $ | 1 |
Consumers |  |  | 253 |  |  | 7 |  |  | (8) |  |  | 19 |  |  | 40 |  |  | 311 |
Total CMS Energy |  | $ | 254 |  | $ | 7 |  | $ | (8) |  | $ | 19 |  | $ | 40 |  | $ | 312 |
Consumers |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Coal ash disposal areas |  | $ | 70 |  | $ | - |  | $ | (3) |  | $ | 7 |  | $ | 40 |  | $ | 114 |
Wells at gas storage fields |  |  | 1 |  |  | - |  |  | (1) |  |  | - |  |  | - |  |  | - |
Asbestos abatement |  |  | 42 |  |  | - |  |  | (1) |  |  | 2 |  |  | - |  |  | 43 |
Gas distribution cut, purge, and cap |  |  | 140 |  |  | 4 |  |  | (3) |  |  | 10 |  |  | - |  |  | 151 |
Wind farm |  |  | - |  |  | 3 |  |  | - |  |  | - |  |  | - |  |  | 3 |
Total Consumers |  | $ | 253 |  | $ | 7 |  | $ | (8) |  | $ | 19 |  | $ | 40 |  | $ | 311 |
In Millions
| ARO |  |  |  |  |  |  |  |  |  |  |  |  | ARO |
| Liability |  |  |  |  |  |  |  |  |  | Cash flow | Liability |
Company and ARO Description | 12/31/2010 | Incurred | Settled1 | Accretion | Revisions | 12/31/2011 |
CMS Energy, including Consumers |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gas treating plant and gas wells |  | $ | 1 |  | $ | - |  | $ | - |  | $ | - |  | $ | - |  | $ | 1 |
Consumers |  |  | 244 |  |  | (2) |  |  | (7) |  |  | 18 |  |  | - |  |  | 253 |
Total CMS Energy |  | $ | 245 |  | $ | (2) |  | $ | (7) |  | $ | 18 |  | $ | - |  | $ | 254 |
Consumers |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Coal ash disposal areas |  | $ | 66 |  | $ | - |  | $ | (2) |  | $ | 6 |  | $ | - |  | $ | 70 |
Wells at gas storage fields |  |  | 1 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 1 |
Indoor gas services relocations |  |  | 1 |  |  | - |  |  | (1) |  |  | - |  |  | - |  |  | - |
Asbestos abatement |  |  | 40 |  |  | - |  |  | (1) |  |  | 3 |  |  | - |  |  | 42 |
Gas distribution cut, purge, and cap |  |  | 136 |  |  | (2) |  |  | (3) |  |  | 9 |  |  | - |  |  | 140 |
Total Consumers |  | $ | 244 |  | $ | (2) |  | $ | (7) |  | $ | 18 |  | $ | - |  | $ | 253 |
1 Cash payments of $8 million in 2012 and $7 million in 2011 were included in other current and non-current assets and liabilities as a component of net cash provided by operating activities in CMS Energy’s and Consumers’ consolidated statements of cash flow.

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- Definition The entire disclosure for an asset retirement obligation and the associated long-lived asset. An asset retirement obligation is a legal obligation associated with the disposal or retirement from service of a tangible long-lived asset that results from the acquisition, construction or development, or the normal operations of a long-lived asset, except for certain obligations of lessees. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 410 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6392692&loc=d3e7535-110849 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 410 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6392692&loc=d3e7569-110849 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 143 -Paragraph 22 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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