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Asset Retirement Obligations | 12 Months Ended
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Dec. 31, 2016
Asset Retirement Obligations | 11:A sset R etirement O bligations 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 l egal obligation to remove them. 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. CMS Energy and Consumers calculate the fair value of ARO liabilities using an expected present-value technique that reflects assumptions about costs and inflation, and uses a credit-adjusted risk-free rate to discount the expected cash flows. CMS Energy’s ARO liabilities are primarily at Consumers. As a regulated entity, Consumers defers the effects of any changes in assumptions on the fair values of its ARO liabilities, adjusting the associated regulatory assets or liabilities rather than recognizing such effects in earnings. 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:
﻿ |  |  |
﻿ |  |  |
﻿Company and ARO Description | In-Service 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 |
﻿Gas distribution cut, purge, and cap | Various | Gas distribution mains and services |
﻿Asbestos abatement | 1973 | Electric and gas utility plant |
﻿Closure of renewable generation assets | 2012,2014,2016 | Wind and solar generation facilities |
﻿Consumers |  |  |
﻿Closure of coal ash disposal areas | Various | Generating plants coal ash areas |
﻿Gas distribution cut, purge, and cap | Various | Gas distribution mains and services |
﻿Asbestos abatement | 1973 | Electric and gas utility plant |
﻿Closure of renewable generation assets | 2012,2014,2016 | Wind and solar 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 | 12/31/2015 | Incurred | Settled | Accretion | Revisions | 12/31/2016 |
﻿CMS Energy, including Consumers |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Consumers |  | $ | 438 |  | $ | 3 |  | $ | (18) |  | $ | 23 |  | $ | - |  | $ | 446 |
﻿Gas treating plant and gas wells |  |  | 1 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 1 |
﻿Total CMS Energy |  | $ | 439 |  | $ | 3 |  | $ | (18) |  | $ | 23 |  | $ | - |  | $ | 447 |
﻿Consumers |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Coal ash disposal areas |  | $ | 200 |  | $ | - |  | $ | (8) |  | $ | 9 |  | $ | - |  | $ | 201 |
﻿Gas distribution cut, purge, and cap |  |  | 178 |  |  | 2 |  |  | (9) |  |  | 11 |  |  | - |  |  | 182 |
﻿Asbestos abatement |  |  | 54 |  |  | - |  |  | (1) |  |  | 3 |  |  | - |  |  | 56 |
﻿Renewable generation assets |  |  | 6 |  |  | 1 |  |  | - |  |  | - |  |  | - |  |  | 7 |
﻿Total Consumers |  | $ | 438 |  | $ | 3 |  | $ | (18) |  | $ | 23 |  | $ | - |  | $ | 446 |
﻿
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿In Millions
﻿ | ARO |  |  |  |  |  |  |  |  |  |  |  |  | ARO |
﻿ | Liability |  |  |  |  |  |  |  |  |  | Cash flow | Liability |
﻿Company and ARO Description | 12/31/2014 | Incurred | Settled | Accretion | Revisions | 12/31/2015 |
﻿CMS Energy, including Consumers |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Consumers |  | $ | 339 |  | $ | 11 |  | $ | (6) |  | $ | 20 |  | $ | 74 |  | $ | 438 |
﻿Gas treating plant and gas wells |  |  | 1 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 1 |
﻿Total CMS Energy |  | $ | 340 |  | $ | 11 |  | $ | (6) |  | $ | 20 |  | $ | 74 |  | $ | 439 |
﻿Consumers |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Coal ash disposal areas |  | $ | 120 |  | $ | - |  | $ | - |  | $ | 6 |  | $ | 74 |  | $ | 200 |
﻿Gas distribution cut, purge, and cap |  |  | 162 |  |  | 11 |  |  | (6) |  |  | 11 |  |  | - |  |  | 178 |
﻿Asbestos abatement |  |  | 51 |  |  | - |  |  | - |  |  | 3 |  |  | - |  |  | 54 |
﻿Renewable generation assets |  |  | 6 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 6 |
﻿Total Consumers |  | $ | 339 |  | $ | 11 |  | $ | (6) |  | $ | 20 |  | $ | 74 |  | $ | 438 |
﻿ In 2015, Consumers increased its ARO liability for coal ash disposal areas. The increase was attributable to proposed changes in state regulations based on the EPA’s final rule regarding CCRs, which provided Consumers with sufficient information to reasonably estimate an additional ARO liability associated with closure work at certain waste management facilities.
Consumers Energy Company [Member] |
Asset Retirement Obligations | 11:A sset R etirement O bligations 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 l egal obligation to remove them. 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. CMS Energy and Consumers calculate the fair value of ARO liabilities using an expected present-value technique that reflects assumptions about costs and inflation, and uses a credit-adjusted risk-free rate to discount the expected cash flows. CMS Energy’s ARO liabilities are primarily at Consumers. As a regulated entity, Consumers defers the effects of any changes in assumptions on the fair values of its ARO liabilities, adjusting the associated regulatory assets or liabilities rather than recognizing such effects in earnings. 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:
﻿ |  |  |
﻿ |  |  |
﻿Company and ARO Description | In-Service 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 |
﻿Gas distribution cut, purge, and cap | Various | Gas distribution mains and services |
﻿Asbestos abatement | 1973 | Electric and gas utility plant |
﻿Closure of renewable generation assets | 2012,2014,2016 | Wind and solar generation facilities |
﻿Consumers |  |  |
﻿Closure of coal ash disposal areas | Various | Generating plants coal ash areas |
﻿Gas distribution cut, purge, and cap | Various | Gas distribution mains and services |
﻿Asbestos abatement | 1973 | Electric and gas utility plant |
﻿Closure of renewable generation assets | 2012,2014,2016 | Wind and solar 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 | 12/31/2015 | Incurred | Settled | Accretion | Revisions | 12/31/2016 |
﻿CMS Energy, including Consumers |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Consumers |  | $ | 438 |  | $ | 3 |  | $ | (18) |  | $ | 23 |  | $ | - |  | $ | 446 |
﻿Gas treating plant and gas wells |  |  | 1 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 1 |
﻿Total CMS Energy |  | $ | 439 |  | $ | 3 |  | $ | (18) |  | $ | 23 |  | $ | - |  | $ | 447 |
﻿Consumers |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Coal ash disposal areas |  | $ | 200 |  | $ | - |  | $ | (8) |  | $ | 9 |  | $ | - |  | $ | 201 |
﻿Gas distribution cut, purge, and cap |  |  | 178 |  |  | 2 |  |  | (9) |  |  | 11 |  |  | - |  |  | 182 |
﻿Asbestos abatement |  |  | 54 |  |  | - |  |  | (1) |  |  | 3 |  |  | - |  |  | 56 |
﻿Renewable generation assets |  |  | 6 |  |  | 1 |  |  | - |  |  | - |  |  | - |  |  | 7 |
﻿Total Consumers |  | $ | 438 |  | $ | 3 |  | $ | (18) |  | $ | 23 |  | $ | - |  | $ | 446 |
﻿
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿In Millions
﻿ | ARO |  |  |  |  |  |  |  |  |  |  |  |  | ARO |
﻿ | Liability |  |  |  |  |  |  |  |  |  | Cash flow | Liability |
﻿Company and ARO Description | 12/31/2014 | Incurred | Settled | Accretion | Revisions | 12/31/2015 |
﻿CMS Energy, including Consumers |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Consumers |  | $ | 339 |  | $ | 11 |  | $ | (6) |  | $ | 20 |  | $ | 74 |  | $ | 438 |
﻿Gas treating plant and gas wells |  |  | 1 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 1 |
﻿Total CMS Energy |  | $ | 340 |  | $ | 11 |  | $ | (6) |  | $ | 20 |  | $ | 74 |  | $ | 439 |
﻿Consumers |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Coal ash disposal areas |  | $ | 120 |  | $ | - |  | $ | - |  | $ | 6 |  | $ | 74 |  | $ | 200 |
﻿Gas distribution cut, purge, and cap |  |  | 162 |  |  | 11 |  |  | (6) |  |  | 11 |  |  | - |  |  | 178 |
﻿Asbestos abatement |  |  | 51 |  |  | - |  |  | - |  |  | 3 |  |  | - |  |  | 54 |
﻿Renewable generation assets |  |  | 6 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 6 |
﻿Total Consumers |  | $ | 339 |  | $ | 11 |  | $ | (6) |  | $ | 20 |  | $ | 74 |  | $ | 438 |
﻿ In 2015, Consumers increased its ARO liability for coal ash disposal areas. The increase was attributable to proposed changes in state regulations based on the EPA’s final rule regarding CCRs, which provided Consumers with sufficient information to reasonably estimate an additional ARO liability associated with closure work at certain waste management facilities.

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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 + Details
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