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Variable Interest Entities | 9 Months Ended
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Sep. 30, 2025
Variable Interest Entity [Line Items] |
Variable Interest Entities | Variable Interest Entities Consolidated VIEs: In March 2025, NorthStar Clean Energy sold a 50‑percent interest in NWO Wind Equity Holdings for net proceeds of $36 million. NWO Wind Equity Holdings holds the Class B membership interest in NWO Holdco, the holding company of a 100‑MW wind project located in Paulding County, Ohio. Additionally in March 2025, NorthStar Clean Energy sold a 50‑percent interest in Delta Solar Equity Holdings for net proceeds of $8 million. Delta Solar Equity Holdings is the holding company of a 24-MW solar project located in Delta Township, Michigan. NorthStar Clean Energy consolidates these and other entities that it does not wholly own, but for which it manages and controls the entities’ operating activities. NorthStar Clean Energy is the primary beneficiary of these entities because it has the power to direct the activities that most significantly impact the economic performance of the companies, as well as the obligation to absorb losses or the right to receive benefits from the companies. Presented in the following table is information about the VIEs NorthStar Clean Energy consolidates:
Consolidated VIE | NorthStar Clean Energy’s ownership interest | Description of VIE
Aviator Wind Equity Holdings | 51‑percent ownership interest 1 | Holds a Class B membership interest in Aviator Wind
Aviator Wind | Class B membership interest 2 | Holding company of a 525‑MW wind generation project in Coke County, Texas
Delta Solar Equity Holdings | 50‑percent ownership interest 1 | Holding company of a 24-MW solar generation project in Delta Township, Michigan
Newport Solar Holdings | Class B membership interest 2 | Holding company of a 180‑MW solar generation project in Jackson County, Arkansas
NWO Wind Equity Holdings | 50‑percent ownership interest 1 | Holds a Class B membership interest in NWO Holdco
NWO Holdco | Class B membership interest 2 | Holding company of a 100‑MW wind generation project in Paulding County, Ohio
1 The remaining ownership interest is presented as noncontrolling interest on CMS Energy’s consolidated balance sheets. 2 The Class A membership interest in the entity is held by a tax equity investor and is presented as noncontrolling interest on CMS Energy’s consolidated balance sheets. Under the associated limited liability company agreement, the tax equity investor is guaranteed preferred returns from the entity. Earnings, tax attributes, and cash flows generated by the entities in which NorthStar Clean Energy holds a Class B membership are allocated among and distributed to the membership classes in accordance with the ratios specified in the associated limited liability company agreements; these ratios change over time and are not representative of the ownership interest percentages of each membership class. Since these entities’ income and cash flows are not distributed among their investors based on ownership interest percentages, NorthStar Clean Energy allocates the entities’ income (loss) among the investors by applying the hypothetical liquidation at book value method. This method calculates each investor’s earnings based on a hypothetical liquidation of the entities at the net book value of underlying assets as of the balance sheet date. The liquidation tax gain (loss) is allocated to each investor’s capital account, resulting in income (loss) equal to the period change in the investor’s capital account balance. Presented in the following table are the carrying values of the VIEs’ assets and liabilities included on CMS Energy’s consolidated balance sheets:
In Millions
| September 30, 2025 | December 31, 2024
Current |  |  |  |
Cash and cash equivalents |  | $ | 19 |  |  | $ | 18 |
Accounts receivable |  | 3 |  |  | 4 |
Prepayments and other current assets |  | 3 |  |  | 3 |
Non-current |  |  |  |
Plant, property, and equipment, net |  | 1,028 |  |  | 1,024 |
Other non-current assets |  | 6 |  |  | 3 |
Total assets 1 |  | $ | 1,059 |  |  | $ | 1,052 |
Current |  |  |  |
Accounts payable |  | $ | 9 |  |  | $ | 8 |
Accrued taxes |  | 1 |  |  | — |
Non-current |  |  |  |
Non-current portion of finance leases |  | 24 |  |  | 23 |
Asset retirement obligations |  | 35 |  |  | 33 |
Other non-current liabilities |  | 3 |  |  | — |
Total liabilities |  | $ | 72 |  |  | $ | 64 |
1 Assets may be used only to meet VIEs’ obligations and commitments. NorthStar Clean Energy is obligated under certain indemnities that protect the tax equity investors against losses incurred as a result of breaches of representations and warranties under the associated limited liability company agreements. For additional details on these indemnity obligations, see Note 2, Contingencies and Commitments—Guarantees. Consumers’ wholly-owned subsidiaries, Consumers 2014 Securitization Funding and Consumers 2023 Securitization Funding, are VIEs designed to collateralize Consumers’ securitization bonds. These entities are considered VIEs primarily because their equity capitalization is insufficient to support their operations. Consumers is the primary beneficiary of and consolidates these VIEs, as it has the power to direct the activities that most significantly impact the economic performance of the companies, as well as the obligation to absorb losses or the right to receive benefits from the companies. The VIEs’ primary assets and liabilities comprise non-current regulatory assets and long-term debt. The carrying value of the regulatory assets on Consumers’ consolidated balance sheets was $580 million at September 30, 2025 and $666 million at December 31, 2024. The carrying value of securitization bonds on Consumers’ consolidated balance sheets was $600 million at September 30, 2025 and $700 million at December 31, 2024. Non-consolidated VIEs: NorthStar Clean Energy has variable interests in T.E.S. Filer City, Grayling, Genesee, and Craven. While NorthStar Clean Energy owns 50 percent of each partnership, it is not the primary beneficiary of any of these partnerships because decision making is shared among unrelated parties, and no one party has the ability to direct the activities that most significantly impact the entities’ economic performance, such as operations and maintenance, plant dispatch, and fuel strategy. The partners must agree on all major decisions for each of the partnerships. Presented in the following table is information about these partnerships:
Name | Nature of the Entity | Nature of NorthStar Clean Energy’s Involvement
T.E.S. Filer City | Coal-fueled power generator | Long-term PPA between partnership and Consumers
Employee assignment agreement
Grayling | Wood waste-fueled power generator | Long-term PPA between partnership and Consumers
Reduced dispatch agreement with Consumers 1
Operating and management contract
Genesee | Wood waste-fueled power generator | Long-term PPA between partnership and Consumers
Reduced dispatch agreement with Consumers 1
Operating and management contract
Craven | Wood waste-fueled power generator | Operating and management contract
1 Reduced dispatch agreements allow the facilities to be dispatched based on the market price of power compared with the cost of production of the plants. This results in fuel cost savings that each partnership shares with Consumers’ customers. The creditors of these partnerships do not have recourse to the general credit of CMS Energy, NorthStar Clean Energy, or Consumers. NorthStar Clean Energy’s maximum risk exposure to these partnerships is generally limited to its investment in the partnerships, which is included in investments on CMS Energy’s consolidated balance sheets in the amount of $59 million at September 30, 2025 and $64 million at December 31, 2024.
Consumers Energy Company |
Variable Interest Entity [Line Items] |
Variable Interest Entities | Variable Interest Entities Consolidated VIEs: In March 2025, NorthStar Clean Energy sold a 50‑percent interest in NWO Wind Equity Holdings for net proceeds of $36 million. NWO Wind Equity Holdings holds the Class B membership interest in NWO Holdco, the holding company of a 100‑MW wind project located in Paulding County, Ohio. Additionally in March 2025, NorthStar Clean Energy sold a 50‑percent interest in Delta Solar Equity Holdings for net proceeds of $8 million. Delta Solar Equity Holdings is the holding company of a 24-MW solar project located in Delta Township, Michigan. NorthStar Clean Energy consolidates these and other entities that it does not wholly own, but for which it manages and controls the entities’ operating activities. NorthStar Clean Energy is the primary beneficiary of these entities because it has the power to direct the activities that most significantly impact the economic performance of the companies, as well as the obligation to absorb losses or the right to receive benefits from the companies. Presented in the following table is information about the VIEs NorthStar Clean Energy consolidates:
Consolidated VIE | NorthStar Clean Energy’s ownership interest | Description of VIE
Aviator Wind Equity Holdings | 51‑percent ownership interest 1 | Holds a Class B membership interest in Aviator Wind
Aviator Wind | Class B membership interest 2 | Holding company of a 525‑MW wind generation project in Coke County, Texas
Delta Solar Equity Holdings | 50‑percent ownership interest 1 | Holding company of a 24-MW solar generation project in Delta Township, Michigan
Newport Solar Holdings | Class B membership interest 2 | Holding company of a 180‑MW solar generation project in Jackson County, Arkansas
NWO Wind Equity Holdings | 50‑percent ownership interest 1 | Holds a Class B membership interest in NWO Holdco
NWO Holdco | Class B membership interest 2 | Holding company of a 100‑MW wind generation project in Paulding County, Ohio
1 The remaining ownership interest is presented as noncontrolling interest on CMS Energy’s consolidated balance sheets. 2 The Class A membership interest in the entity is held by a tax equity investor and is presented as noncontrolling interest on CMS Energy’s consolidated balance sheets. Under the associated limited liability company agreement, the tax equity investor is guaranteed preferred returns from the entity. Earnings, tax attributes, and cash flows generated by the entities in which NorthStar Clean Energy holds a Class B membership are allocated among and distributed to the membership classes in accordance with the ratios specified in the associated limited liability company agreements; these ratios change over time and are not representative of the ownership interest percentages of each membership class. Since these entities’ income and cash flows are not distributed among their investors based on ownership interest percentages, NorthStar Clean Energy allocates the entities’ income (loss) among the investors by applying the hypothetical liquidation at book value method. This method calculates each investor’s earnings based on a hypothetical liquidation of the entities at the net book value of underlying assets as of the balance sheet date. The liquidation tax gain (loss) is allocated to each investor’s capital account, resulting in income (loss) equal to the period change in the investor’s capital account balance. Presented in the following table are the carrying values of the VIEs’ assets and liabilities included on CMS Energy’s consolidated balance sheets:
In Millions
| September 30, 2025 | December 31, 2024
Current |  |  |  |
Cash and cash equivalents |  | $ | 19 |  |  | $ | 18 |
Accounts receivable |  | 3 |  |  | 4 |
Prepayments and other current assets |  | 3 |  |  | 3 |
Non-current |  |  |  |
Plant, property, and equipment, net |  | 1,028 |  |  | 1,024 |
Other non-current assets |  | 6 |  |  | 3 |
Total assets 1 |  | $ | 1,059 |  |  | $ | 1,052 |
Current |  |  |  |
Accounts payable |  | $ | 9 |  |  | $ | 8 |
Accrued taxes |  | 1 |  |  | — |
Non-current |  |  |  |
Non-current portion of finance leases |  | 24 |  |  | 23 |
Asset retirement obligations |  | 35 |  |  | 33 |
Other non-current liabilities |  | 3 |  |  | — |
Total liabilities |  | $ | 72 |  |  | $ | 64 |
1 Assets may be used only to meet VIEs’ obligations and commitments. NorthStar Clean Energy is obligated under certain indemnities that protect the tax equity investors against losses incurred as a result of breaches of representations and warranties under the associated limited liability company agreements. For additional details on these indemnity obligations, see Note 2, Contingencies and Commitments—Guarantees. Consumers’ wholly-owned subsidiaries, Consumers 2014 Securitization Funding and Consumers 2023 Securitization Funding, are VIEs designed to collateralize Consumers’ securitization bonds. These entities are considered VIEs primarily because their equity capitalization is insufficient to support their operations. Consumers is the primary beneficiary of and consolidates these VIEs, as it has the power to direct the activities that most significantly impact the economic performance of the companies, as well as the obligation to absorb losses or the right to receive benefits from the companies. The VIEs’ primary assets and liabilities comprise non-current regulatory assets and long-term debt. The carrying value of the regulatory assets on Consumers’ consolidated balance sheets was $580 million at September 30, 2025 and $666 million at December 31, 2024. The carrying value of securitization bonds on Consumers’ consolidated balance sheets was $600 million at September 30, 2025 and $700 million at December 31, 2024. Non-consolidated VIEs: NorthStar Clean Energy has variable interests in T.E.S. Filer City, Grayling, Genesee, and Craven. While NorthStar Clean Energy owns 50 percent of each partnership, it is not the primary beneficiary of any of these partnerships because decision making is shared among unrelated parties, and no one party has the ability to direct the activities that most significantly impact the entities’ economic performance, such as operations and maintenance, plant dispatch, and fuel strategy. The partners must agree on all major decisions for each of the partnerships. Presented in the following table is information about these partnerships:
Name | Nature of the Entity | Nature of NorthStar Clean Energy’s Involvement
T.E.S. Filer City | Coal-fueled power generator | Long-term PPA between partnership and Consumers
Employee assignment agreement
Grayling | Wood waste-fueled power generator | Long-term PPA between partnership and Consumers
Reduced dispatch agreement with Consumers 1
Operating and management contract
Genesee | Wood waste-fueled power generator | Long-term PPA between partnership and Consumers
Reduced dispatch agreement with Consumers 1
Operating and management contract
Craven | Wood waste-fueled power generator | Operating and management contract
1 Reduced dispatch agreements allow the facilities to be dispatched based on the market price of power compared with the cost of production of the plants. This results in fuel cost savings that each partnership shares with Consumers’ customers. The creditors of these partnerships do not have recourse to the general credit of CMS Energy, NorthStar Clean Energy, or Consumers. NorthStar Clean Energy’s maximum risk exposure to these partnerships is generally limited to its investment in the partnerships, which is included in investments on CMS Energy’s consolidated balance sheets in the amount of $59 million at September 30, 2025 and $64 million at December 31, 2024.

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