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v3.22.2.2

Financings and Capitalization | 9 Months Ended
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Sep. 30, 2022
Debt Instrument [Line Items] |
Financings and Capitalization | Financings and Capitalization Financings: Presented in the following table is a summary of major long-term debt issuances during the nine months ended September 30, 2022:
| Principal (In Millions) | Interest Rate | Issuance Date | Maturity Date
Consumers |  |  |  |  |
Term loan facility 1 |  | $ | 550 |  | variable | July 2022 | January 2024
First mortgage bonds |  | 350 |  | 3.600 | % | August 2022 | August 2032
First mortgage bonds |  | 450 |  | 4.200 | % | August 2022 | September 2052
1 In July 2022, Consumers entered into a delayed-draw $1.0 billion unsecured term loan credit agreement. Loans under this facility have an interest rate of one-month SOFR plus 0.650 percent. At September 30, 2022, Consumers had loans outstanding of $300 million at a rate of 3.456 percent and $250 million at a rate of 3.714 percent. Presented in the following table is a summary of major long-term debt retirements during the nine months ended September 30, 2022:
| Principal (In Millions) | Interest Rate | Retirement Date | Maturity Date
NorthStar Clean Energy, including subsidiaries |  |  |  |  |
Term loan facility |  | $ | 76 |  | variable | June 2022 | October 2025
In June 2022, NorthStar Clean Energy sold a Class A membership interest in NWO Holdco to a tax equity investor for $49 million. Proceeds from the sale were used to retire the non-recourse debt held by a subsidiary of NorthStar Clean Energy. For more information, see Note 13, Variable Interest Entities. Credit Facilities: The following credit facilities with banks were available at September 30, 2022:
In Millions
Expiration Date | Amount of Facility | Amount Borrowed | Letters of Credit Outstanding | Amount Available
CMS Energy, parent only |  |  |  |  |  |  |  |
June 5, 2024 |  | $ | 550 |  |  | $ | — |  |  | $ | 14 |  |  | $ | 536 |
September 22, 2024 |  | 50 |  |  | — |  |  | 50 |  |  | — |
NorthStar Clean Energy, including subsidiaries |  |  |  |  |  |  |  |
September 25, 2025 1 |  | $ | 37 |  |  | $ | — |  |  | $ | 37 |  |  | $ | — |
Consumers 2 |  |  |  |  |  |  |  |
June 5, 2024 |  | $ | 850 |  |  | $ | — |  |  | $ | 29 |  |  | $ | 821 |
November 19, 2023 |  | 250 |  |  | — |  |  | 62 |  |  | 188 |
1 This letter of credit facility is available to Aviator Wind Equity Holdings. For more information regarding Aviator Wind Equity Holdings, see Note 13, Variable Interest Entities. 2 Obligations under these facilities are secured by first mortgage bonds of Consumers. Regulatory Authorization for Financings: Consumers is required to maintain FERC authorization for financings. Any long-term issuances during the authorization period are exempt from FERC’s competitive bidding and negotiated placement requirements. In March 2022, the FERC issued an authorization for financings that was set to expire on March 31, 2023. In April 2022, FERC issued a revision of its March authorization for financings that extends the expiration to March 31, 2024. Short-term Borrowings: Under Consumers’ commercial paper program, Consumers may issue, in one or more placements, investment-grade commercial paper notes with maturities of up to 365 days at market interest rates. These issuances are supported by Consumers’ revolving credit facilities and may have an aggregate principal amount outstanding of up to $500 million. While the amount of outstanding commercial paper does not reduce the available capacity of the revolving credit facilities, Consumers does not intend to issue commercial paper in an amount exceeding the available capacity of the facilities. At September 30, 2022, there were no commercial paper notes outstanding under this program. In December 2021, Consumers renewed a short-term credit agreement with CMS Energy, permitting Consumers to borrow up to $500 million at an interest rate of the prior month’s average one-month LIBOR minus 0.100 percent. At September 30, 2022, there were no outstanding borrowings under the agreement. Dividend Restrictions: At September 30, 2022, payment of dividends by CMS Energy on its common stock was limited to $6.7 billion under provisions of the Michigan Business Corporation Act of 1972. Under the provisions of its articles of incorporation, at September 30, 2022, Consumers had $1.9 billion of unrestricted retained earnings available to pay dividends on its common stock to CMS Energy. Provisions of the Federal Power Act and the Natural Gas Act appear to restrict dividends payable by Consumers to the amount of Consumers’ retained earnings. Several decisions from FERC suggest that, under a variety of circumstances, dividends from Consumers on its common stock would not be limited to amounts in Consumers’ retained earnings. Any decision by Consumers to pay dividends on its common stock in excess of retained earnings would be based on specific facts and circumstances and would be subject to a formal regulatory filing process. During the nine months ended September 30, 2022, Consumers paid $593 million in dividends on its common stock to CMS Energy. Issuance of Common Stock: Under an existing equity offering program, CMS Energy may sell shares of its common stock having an aggregate sales price of up to $500 million in privately negotiated transactions, in “at the market” offerings, through forward sales transactions, or otherwise. Presented in the following table are details of CMS Energy’s forward sales contracts under this program at September 30, 2022:
|  |  | Forward Price Per Share
Contract Date | Maturity Date | Number of Shares | Initial | September 30, 2022
September 15, 2020 | December 31, 2022 | 846,759 |  | $ | 61.04 |  |  | $ | 57.31 |
December 22, 2020 | December 31, 2023 | 115,595 |  | 61.81 |  |  | 58.65 |
August 3, 2022 | February 1, 2024 | 2,944,207 |  | 67.59 |  |  | 67.78 |
August 24, 2022 | February 26, 2024 | 1,677,938 |  | 69.46 |  |  | 69.59 |
August 29, 2022 | February 26, 2024 | 1,783,388 |  | 68.18 |  |  | 68.29 |
These contracts allow CMS Energy to either physically settle the contracts by issuing shares of its common stock at the then-applicable forward sale price specified by the agreement or net settle the contracts through the delivery or receipt of cash or shares. CMS Energy may settle the contracts at any time through their maturity dates, and presently intends to physically settle the contracts by delivering shares of its common stock. The initial forward price in the forward equity sale contracts includes a deduction for commissions and will be adjusted on a daily basis over the term based on an interest rate factor and decreased on certain dates by certain predetermined amounts to reflect expected dividend payments. No amounts are recorded on CMS Energy’s consolidated balance sheets until settlements of the forward equity sale contracts occur. If CMS Energy had elected to net cash settle the contracts as of September 30, 2022, it would have been required to pay less than $1 million. If CMS Energy had elected to net share settle the contracts as of September 30, 2022, CMS Energy would have been required to deliver 13,504 shares.
Consumers Energy Company |
Debt Instrument [Line Items] |
Financings and Capitalization | Financings and Capitalization Financings: Presented in the following table is a summary of major long-term debt issuances during the nine months ended September 30, 2022:
| Principal (In Millions) | Interest Rate | Issuance Date | Maturity Date
Consumers |  |  |  |  |
Term loan facility 1 |  | $ | 550 |  | variable | July 2022 | January 2024
First mortgage bonds |  | 350 |  | 3.600 | % | August 2022 | August 2032
First mortgage bonds |  | 450 |  | 4.200 | % | August 2022 | September 2052
1 In July 2022, Consumers entered into a delayed-draw $1.0 billion unsecured term loan credit agreement. Loans under this facility have an interest rate of one-month SOFR plus 0.650 percent. At September 30, 2022, Consumers had loans outstanding of $300 million at a rate of 3.456 percent and $250 million at a rate of 3.714 percent. Presented in the following table is a summary of major long-term debt retirements during the nine months ended September 30, 2022:
| Principal (In Millions) | Interest Rate | Retirement Date | Maturity Date
NorthStar Clean Energy, including subsidiaries |  |  |  |  |
Term loan facility |  | $ | 76 |  | variable | June 2022 | October 2025
In June 2022, NorthStar Clean Energy sold a Class A membership interest in NWO Holdco to a tax equity investor for $49 million. Proceeds from the sale were used to retire the non-recourse debt held by a subsidiary of NorthStar Clean Energy. For more information, see Note 13, Variable Interest Entities. Credit Facilities: The following credit facilities with banks were available at September 30, 2022:
In Millions
Expiration Date | Amount of Facility | Amount Borrowed | Letters of Credit Outstanding | Amount Available
CMS Energy, parent only |  |  |  |  |  |  |  |
June 5, 2024 |  | $ | 550 |  |  | $ | — |  |  | $ | 14 |  |  | $ | 536 |
September 22, 2024 |  | 50 |  |  | — |  |  | 50 |  |  | — |
NorthStar Clean Energy, including subsidiaries |  |  |  |  |  |  |  |
September 25, 2025 1 |  | $ | 37 |  |  | $ | — |  |  | $ | 37 |  |  | $ | — |
Consumers 2 |  |  |  |  |  |  |  |
June 5, 2024 |  | $ | 850 |  |  | $ | — |  |  | $ | 29 |  |  | $ | 821 |
November 19, 2023 |  | 250 |  |  | — |  |  | 62 |  |  | 188 |
1 This letter of credit facility is available to Aviator Wind Equity Holdings. For more information regarding Aviator Wind Equity Holdings, see Note 13, Variable Interest Entities. 2 Obligations under these facilities are secured by first mortgage bonds of Consumers. Regulatory Authorization for Financings: Consumers is required to maintain FERC authorization for financings. Any long-term issuances during the authorization period are exempt from FERC’s competitive bidding and negotiated placement requirements. In March 2022, the FERC issued an authorization for financings that was set to expire on March 31, 2023. In April 2022, FERC issued a revision of its March authorization for financings that extends the expiration to March 31, 2024. Short-term Borrowings: Under Consumers’ commercial paper program, Consumers may issue, in one or more placements, investment-grade commercial paper notes with maturities of up to 365 days at market interest rates. These issuances are supported by Consumers’ revolving credit facilities and may have an aggregate principal amount outstanding of up to $500 million. While the amount of outstanding commercial paper does not reduce the available capacity of the revolving credit facilities, Consumers does not intend to issue commercial paper in an amount exceeding the available capacity of the facilities. At September 30, 2022, there were no commercial paper notes outstanding under this program. In December 2021, Consumers renewed a short-term credit agreement with CMS Energy, permitting Consumers to borrow up to $500 million at an interest rate of the prior month’s average one-month LIBOR minus 0.100 percent. At September 30, 2022, there were no outstanding borrowings under the agreement. Dividend Restrictions: At September 30, 2022, payment of dividends by CMS Energy on its common stock was limited to $6.7 billion under provisions of the Michigan Business Corporation Act of 1972. Under the provisions of its articles of incorporation, at September 30, 2022, Consumers had $1.9 billion of unrestricted retained earnings available to pay dividends on its common stock to CMS Energy. Provisions of the Federal Power Act and the Natural Gas Act appear to restrict dividends payable by Consumers to the amount of Consumers’ retained earnings. Several decisions from FERC suggest that, under a variety of circumstances, dividends from Consumers on its common stock would not be limited to amounts in Consumers’ retained earnings. Any decision by Consumers to pay dividends on its common stock in excess of retained earnings would be based on specific facts and circumstances and would be subject to a formal regulatory filing process. During the nine months ended September 30, 2022, Consumers paid $593 million in dividends on its common stock to CMS Energy. Issuance of Common Stock: Under an existing equity offering program, CMS Energy may sell shares of its common stock having an aggregate sales price of up to $500 million in privately negotiated transactions, in “at the market” offerings, through forward sales transactions, or otherwise. Presented in the following table are details of CMS Energy’s forward sales contracts under this program at September 30, 2022:
|  |  | Forward Price Per Share
Contract Date | Maturity Date | Number of Shares | Initial | September 30, 2022
September 15, 2020 | December 31, 2022 | 846,759 |  | $ | 61.04 |  |  | $ | 57.31 |
December 22, 2020 | December 31, 2023 | 115,595 |  | 61.81 |  |  | 58.65 |
August 3, 2022 | February 1, 2024 | 2,944,207 |  | 67.59 |  |  | 67.78 |
August 24, 2022 | February 26, 2024 | 1,677,938 |  | 69.46 |  |  | 69.59 |
August 29, 2022 | February 26, 2024 | 1,783,388 |  | 68.18 |  |  | 68.29 |
These contracts allow CMS Energy to either physically settle the contracts by issuing shares of its common stock at the then-applicable forward sale price specified by the agreement or net settle the contracts through the delivery or receipt of cash or shares. CMS Energy may settle the contracts at any time through their maturity dates, and presently intends to physically settle the contracts by delivering shares of its common stock. The initial forward price in the forward equity sale contracts includes a deduction for commissions and will be adjusted on a daily basis over the term based on an interest rate factor and decreased on certain dates by certain predetermined amounts to reflect expected dividend payments. No amounts are recorded on CMS Energy’s consolidated balance sheets until settlements of the forward equity sale contracts occur. If CMS Energy had elected to net cash settle the contracts as of September 30, 2022, it would have been required to pay less than $1 million. If CMS Energy had elected to net share settle the contracts as of September 30, 2022, CMS Energy would have been required to deliver 13,504 shares.

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