CMS ENERGY CORP

Retention Incentive Program: In accordance with its Clean Energy Plan, Consumers plans to retire the J.H. Campbell coal-fueled generating units in 2025. In order to ensure necessary staffing at J.H. Campbell through retirement, Consumers has implemented a retention incentive program. The aggregate cost of the J.H. Campbell program through 2025 is estimated to be less than $50 million. The MPSC has approved deferred accounting treatment for these costs; these expenses are deferred as a regulatory asset.

As of December 31, 2024, the cumulative cost incurred and deferred as a regulatory asset related to the J.H. Campbell retention incentive program was $43 million. Amounts deferred under the program are subsequently collected from customers over three years.

Presented in the following table is a reconciliation of the retention benefit liability recorded in other liabilities on Consumers’ consolidated balance sheets:

1 Includes amounts associated with a retention incentive program at the D.E. Karn coal-fueled generating units; this program concluded following the units’ retirement in June 2023.

2 Includes current portion of other liabilities of $14 million at December 31, 2024 and $7 million at December 31, 2023.

Sale of ASP Business: In April 2024, Consumers sold its unregulated ASP business to a non-affiliated company. Consumers received proceeds of $124 million from the transaction, which resulted in a $110 million gain on the transaction. In its order approving the settlement of Consumers’ 2023 gas rate case, the MPSC authorized sharing the gain, net of transaction costs, with customers. Accordingly, Consumers recorded the gain on the transaction as a regulatory liability on its consolidated balance sheets. For additional information, see Note 2, Regulatory Matters.

In conjunction with the sale, Consumers executed a long-term services agreement, under which it will continue to provide certain services associated with the ASP business for a fee, including billing, collection, and call center services.

Other Sale Activity: In December 2024, NorthStar Clean Energy entered into an agreement to sell, for approximately $40 million, a noncontrolling interest in the holding company of a 100‑MW wind project located in Paulding County, Ohio. Additionally, in January 2025, NorthStar Clean Energy signed an agreement to sell, for approximately $10 million, a noncontrolling interest in the holding company of a 24‑MW solar project located in Delta Township, Michigan and all interest in the holding company of a 3‑MW solar project located in Phillips, Wisconsin. These sales are expected to close in the first half of 2025.