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Exit Activities and Discontinued Operations | 6 Months Ended
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Jun. 30, 2022
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] |
Exit Activities and Discontinued Operations | Exit Activities and Discontinued Operations Exit Activities: Under its Clean Energy Plan, Consumers plans to retire the D.E. Karn coal-fueled electric generating units in 2023. In 2019, Consumers announced a retention incentive program to ensure necessary staffing at the D.E. Karn generating complex through the anticipated retirement of the coal-fueled generating units. Based on the number of employees that have chosen to participate, the aggregate cost of the program through 2023 is estimated to be $35 million. In its order in Consumers’ 2020 electric rate case, the MPSC approved deferred accounting treatment for these costs; Consumers began deferring these costs as a regulatory asset in 2021. Under the 2021 IRP, Consumers will retire the J.H. Campbell coal-fueled generating units in 2025. Similar to the D.E. Karn program, Consumers will provide a retention incentive program to ensure necessary staffing at the J.H. Campbell generating complex through retirement. Based on the number of employees expected to participate, the aggregate cost of the program through 2025 is estimated to be $50 million. Additionally, Consumers recognized $4 million related to severance benefits during the six months ended June 30, 2022. This amount was recorded in other liabilities on its consolidated balance sheets at June 30, 2022. The 2021 IRP provides deferred accounting treatment for the retention and severance costs recognized during 2022; deferral of costs beyond 2022 will be addressed in future rate cases. As of June 30, 2022, the cumulative cost incurred and charged to expense related to the D.E. Karn retention incentive program was $16 million. Additionally, an amount of $4 million has been capitalized as a cost of plant, property, and equipment and an amount of $9 million has been deferred as a regulatory asset. The cumulative cost incurred and deferred as a regulatory asset related to the J.H. Campbell retention incentive program was less than $1 million. Presented in the following table is a reconciliation of the retention benefit liability recorded in other liabilities on Consumers’ consolidated balance sheets:
In Millions
|  |  | Six Months Ended
June 30 |  |  |  | 2022 | 2021
Retention benefit liability at beginning of period |  |  |  |  |  |  | $ | 14 |  |  | $ | 11 |
Costs deferred as a regulatory asset 1 |  |  |  |  |  |  | 3 |  |  | 4 |
Retention benefit liability at the end of the period 2 |  |  |  |  |  |  | $ | 17 |  |  | $ | 15 |
1 Includes $2 million for the three months ended June 30, 2022 and 2021. 2 Includes current portion of other liabilities of $6 million at June 30, 2022 and $5 million at June 30, 2021. Discontinued Operations: On October 1, 2021, EnerBank was acquired by Regions Bank. CMS Energy received proceeds of over $1 billion from the transaction and recognized a pre-tax gain of $657 million in 2021. In March 2022, CMS Energy received $6 million of additional proceeds as the result of a post-closing adjustment. Net of related transaction costs, CMS Energy recognized a pre-tax gain of $5 million during the six months ended June 30, 2022. In December 2021, CMS Energy submitted a notice of disagreement to Regions Bank relating to a $36 million negative post-closing purchase price adjustment that it believed was inconsistent with the merger agreement. In accordance with the merger agreement, the disputed adjustment was submitted to a mutually agreed upon independent accounting firm for final determination. In June 2022, the accounting firm rendered a determination on the disputed items entirely in favor of CMS Energy. As a result, no further adjustment was required in 2022. EnerBank’s results of operations through the date of the sale are presented as income from discontinued operations on CMS Energy’s consolidated statements of income for the three and six months ended June 30, 2021. The table below presents the financial results of EnerBank included in income from discontinued operations:
In Millions
| Three Months Ended |  | Six Months Ended
June 30 | 2022 | 2021 |  | 2022 | 2021 |
Operating revenue |  | $ | — |  |  | $ | 69 |  |  |  | $ | — |  |  | $ | 139 |  |  |
Expenses |  |  |  |  |  |  |  |  |  |  |
Operating expenses |  | — |  |  | 28 |  |  |  | — |  |  | 43 |  |  |
Interest expense |  | — |  |  | 11 |  |  |  | — |  |  | 23 |  |  |
Income before income taxes |  | $ | — |  |  | $ | 30 |  |  |  | $ | — |  |  | $ | 73 |  |  |
Gain on sale 1 |  | — |  |  | (5) |  |  |  | 5 |  |  | (5) |  |  |
Income from discontinued operations before income taxes |  | $ | — |  |  | $ | 25 |  |  |  | $ | 5 |  |  | $ | 68 |  |  |
Income tax expense |  | — |  |  | 7 |  |  |  | 1 |  |  | 16 |  |  |
Income from discontinued operations, net of tax |  | $ | — |  |  | $ | 18 |  |  |  | $ | 4 |  |  | $ | 52 |  |  |
1 Amounts in 2021 represent transaction costs.
Consumers Energy Company |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] |
Exit Activities and Discontinued Operations | Exit Activities and Discontinued Operations Exit Activities: Under its Clean Energy Plan, Consumers plans to retire the D.E. Karn coal-fueled electric generating units in 2023. In 2019, Consumers announced a retention incentive program to ensure necessary staffing at the D.E. Karn generating complex through the anticipated retirement of the coal-fueled generating units. Based on the number of employees that have chosen to participate, the aggregate cost of the program through 2023 is estimated to be $35 million. In its order in Consumers’ 2020 electric rate case, the MPSC approved deferred accounting treatment for these costs; Consumers began deferring these costs as a regulatory asset in 2021. Under the 2021 IRP, Consumers will retire the J.H. Campbell coal-fueled generating units in 2025. Similar to the D.E. Karn program, Consumers will provide a retention incentive program to ensure necessary staffing at the J.H. Campbell generating complex through retirement. Based on the number of employees expected to participate, the aggregate cost of the program through 2025 is estimated to be $50 million. Additionally, Consumers recognized $4 million related to severance benefits during the six months ended June 30, 2022. This amount was recorded in other liabilities on its consolidated balance sheets at June 30, 2022. The 2021 IRP provides deferred accounting treatment for the retention and severance costs recognized during 2022; deferral of costs beyond 2022 will be addressed in future rate cases. As of June 30, 2022, the cumulative cost incurred and charged to expense related to the D.E. Karn retention incentive program was $16 million. Additionally, an amount of $4 million has been capitalized as a cost of plant, property, and equipment and an amount of $9 million has been deferred as a regulatory asset. The cumulative cost incurred and deferred as a regulatory asset related to the J.H. Campbell retention incentive program was less than $1 million. Presented in the following table is a reconciliation of the retention benefit liability recorded in other liabilities on Consumers’ consolidated balance sheets:
In Millions
|  |  | Six Months Ended
June 30 |  |  |  | 2022 | 2021
Retention benefit liability at beginning of period |  |  |  |  |  |  | $ | 14 |  |  | $ | 11 |
Costs deferred as a regulatory asset 1 |  |  |  |  |  |  | 3 |  |  | 4 |
Retention benefit liability at the end of the period 2 |  |  |  |  |  |  | $ | 17 |  |  | $ | 15 |
1 Includes $2 million for the three months ended June 30, 2022 and 2021. 2 Includes current portion of other liabilities of $6 million at June 30, 2022 and $5 million at June 30, 2021. Discontinued Operations: On October 1, 2021, EnerBank was acquired by Regions Bank. CMS Energy received proceeds of over $1 billion from the transaction and recognized a pre-tax gain of $657 million in 2021. In March 2022, CMS Energy received $6 million of additional proceeds as the result of a post-closing adjustment. Net of related transaction costs, CMS Energy recognized a pre-tax gain of $5 million during the six months ended June 30, 2022. In December 2021, CMS Energy submitted a notice of disagreement to Regions Bank relating to a $36 million negative post-closing purchase price adjustment that it believed was inconsistent with the merger agreement. In accordance with the merger agreement, the disputed adjustment was submitted to a mutually agreed upon independent accounting firm for final determination. In June 2022, the accounting firm rendered a determination on the disputed items entirely in favor of CMS Energy. As a result, no further adjustment was required in 2022. EnerBank’s results of operations through the date of the sale are presented as income from discontinued operations on CMS Energy’s consolidated statements of income for the three and six months ended June 30, 2021. The table below presents the financial results of EnerBank included in income from discontinued operations:
In Millions
| Three Months Ended |  | Six Months Ended
June 30 | 2022 | 2021 |  | 2022 | 2021 |
Operating revenue |  | $ | — |  |  | $ | 69 |  |  |  | $ | — |  |  | $ | 139 |  |  |
Expenses |  |  |  |  |  |  |  |  |  |  |
Operating expenses |  | — |  |  | 28 |  |  |  | — |  |  | 43 |  |  |
Interest expense |  | — |  |  | 11 |  |  |  | — |  |  | 23 |  |  |
Income before income taxes |  | $ | — |  |  | $ | 30 |  |  |  | $ | — |  |  | $ | 73 |  |  |
Gain on sale 1 |  | — |  |  | (5) |  |  |  | 5 |  |  | (5) |  |  |
Income from discontinued operations before income taxes |  | $ | — |  |  | $ | 25 |  |  |  | $ | 5 |  |  | $ | 68 |  |  |
Income tax expense |  | — |  |  | 7 |  |  |  | 1 |  |  | 16 |  |  |
Income from discontinued operations, net of tax |  | $ | — |  |  | $ | 18 |  |  |  | $ | 4 |  |  | $ | 52 |  |  |
1 Amounts in 2021 represent transaction costs.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI https://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=2122178 + Details
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