v3.25.4
Variable Interest Entities
 12 Months Ended
Dec. 31, 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.
In December 2025, NorthStar Clean Energy sold a Class A membership interest in BG Solar Holdings to a tax equity investor. BG Solar Holdings is the holding company of a 200‑MW solar generation project being constructed in Branch County, Michigan. All of the project’s nameplate capacity has been committed under a 15‑year renewable energy purchase agreement. The tax equity investor contributed $15 million and recognized a deemed contribution of $35 million associated with BG Solar Holdings’ sale of investment tax credits related to a portion of the project placed into service for tax purposes in 2025. The tax equity investor will contribute additional amounts upon commercial operation of the project in 2026.
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 VIENorthStar Clean Energy’s ownership interestDescription of VIE
Aviator Wind Equity Holdings
51-percent ownership interest1
Holds a Class B membership interest in Aviator Wind
Aviator Wind
Class B membership interest2
Holding company of a 525-MW wind generation project in Coke County, Texas
BG Solar Holdings
Class B membership interest2
Holding company of a 200-MW solar generation project in Branch County, Michigan
Delta Solar Equity Holdings
50-percent ownership interest1
Holding company of a 24-MW solar generation project in Delta Township, Michigan
Newport Solar Holdings
Class B membership interest2
Holding company of a 180‑MW solar generation project in Jackson County, Arkansas
NWO Wind Equity Holdings
50‑percent ownership interest1
Holds a Class B membership interest in NWO Holdco
NWO Holdco
Class B membership interest2
Holding company of a 100-MW wind generation project in Paulding County, Ohio
1The remaining ownership interest is presented as noncontrolling interest on CMS Energy’s consolidated balance sheets.
2The 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
December 3120252024
Current
Cash and cash equivalents$20 $18 
Restricted cash19 — 
Accounts receivable42 4 
Prepayments and other current assets5 3 
Non-current
Plant, property, and equipment, net1,037 1,024 
Construction work in progress357 — 
Other non-current assets5 3 
Total assets1
$1,485 $1,052 
Current
Current portion of long-term debt and finance leases$65 $— 
Accounts payable29 8 
Non-current
Long-term debt118 — 
Non-current portion of finance leases39 23 
AROs38 33 
Other non-current liabilities3 — 
Total liabilities$292 $64 
1Assets 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 4, 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. For more information on
these assets and liabilities, see Note 3, Regulatory Matters—Securitized Costs and Note 5, Financings and Capitalization—Securitization Bonds
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, which are accounted for using the equity method:
NameNature of the EntityNature of NorthStar Clean Energy’s Involvement
T.E.S. Filer City Coal-fueled power generatorLong-term PPA between partnership and Consumers
Employee assignment agreement
Grayling Wood waste-fueled power generatorLong-term PPA between partnership and Consumers
Reduced dispatch agreement with Consumers1
Operating and management contract
Genesee Wood waste-fueled power generatorLong-term PPA between partnership and Consumers
Reduced dispatch agreement with Consumers1
Operating and management contract
Craven Wood waste-fueled power generatorOperating and management contract
1Reduced 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 $54 million at December 31, 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.
In December 2025, NorthStar Clean Energy sold a Class A membership interest in BG Solar Holdings to a tax equity investor. BG Solar Holdings is the holding company of a 200‑MW solar generation project being constructed in Branch County, Michigan. All of the project’s nameplate capacity has been committed under a 15‑year renewable energy purchase agreement. The tax equity investor contributed $15 million and recognized a deemed contribution of $35 million associated with BG Solar Holdings’ sale of investment tax credits related to a portion of the project placed into service for tax purposes in 2025. The tax equity investor will contribute additional amounts upon commercial operation of the project in 2026.
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 VIENorthStar Clean Energy’s ownership interestDescription of VIE
Aviator Wind Equity Holdings
51-percent ownership interest1
Holds a Class B membership interest in Aviator Wind
Aviator Wind
Class B membership interest2
Holding company of a 525-MW wind generation project in Coke County, Texas
BG Solar Holdings
Class B membership interest2
Holding company of a 200-MW solar generation project in Branch County, Michigan
Delta Solar Equity Holdings
50-percent ownership interest1
Holding company of a 24-MW solar generation project in Delta Township, Michigan
Newport Solar Holdings
Class B membership interest2
Holding company of a 180‑MW solar generation project in Jackson County, Arkansas
NWO Wind Equity Holdings
50‑percent ownership interest1
Holds a Class B membership interest in NWO Holdco
NWO Holdco
Class B membership interest2
Holding company of a 100-MW wind generation project in Paulding County, Ohio
1The remaining ownership interest is presented as noncontrolling interest on CMS Energy’s consolidated balance sheets.
2The 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
December 3120252024
Current
Cash and cash equivalents$20 $18 
Restricted cash19 — 
Accounts receivable42 4 
Prepayments and other current assets5 3 
Non-current
Plant, property, and equipment, net1,037 1,024 
Construction work in progress357 — 
Other non-current assets5 3 
Total assets1
$1,485 $1,052 
Current
Current portion of long-term debt and finance leases$65 $— 
Accounts payable29 8 
Non-current
Long-term debt118 — 
Non-current portion of finance leases39 23 
AROs38 33 
Other non-current liabilities3 — 
Total liabilities$292 $64 
1Assets 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 4, 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. For more information on
these assets and liabilities, see Note 3, Regulatory Matters—Securitized Costs and Note 5, Financings and Capitalization—Securitization Bonds
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, which are accounted for using the equity method:
NameNature of the EntityNature of NorthStar Clean Energy’s Involvement
T.E.S. Filer City Coal-fueled power generatorLong-term PPA between partnership and Consumers
Employee assignment agreement
Grayling Wood waste-fueled power generatorLong-term PPA between partnership and Consumers
Reduced dispatch agreement with Consumers1
Operating and management contract
Genesee Wood waste-fueled power generatorLong-term PPA between partnership and Consumers
Reduced dispatch agreement with Consumers1
Operating and management contract
Craven Wood waste-fueled power generatorOperating and management contract
1Reduced 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 $54 million at December 31, 2025 and $64 million at December 31, 2024.