CMS ENERGY CORP

CMS Energy Consolidated Results of Operations

Presented in the following table is a summary of changes to net income available to common stockholders for the three and nine months ended September 30, 2026 versus 2025:

1 See Notes to the Unaudited Consolidated Financial Statements—Note 2, Regulatory Matters—J.H. Campbell Emergency Orders.

2 See Notes to the Unaudited Consolidated Financial Statements—Note 2, Regulatory Matters—Service Restoration Cost Deferral.

Consumers Electric Utility Results of Operations

Presented in the following table are the detailed changes to the electric utility’s net income available to common stockholders for the three and nine months ended September 30, 2026 versus 2025:

1 For the three months ended September 30, deliveries to end-use customers were 10.7 billion kWh in 2026 and 10.4 billion kWh in 2025. For the nine months ended September 30, deliveries to end-use customers were 28.7 billion kWh in 2026 and 28.4 billion kWh in 2025.

2 See Notes to the Unaudited Consolidated Financial Statements—Note 2, Regulatory Matters—Service Restoration Cost Deferral.

3 See Notes to the Unaudited Consolidated Financial Statements—Note 2, Regulatory Matters—J.H. Campbell Emergency Orders.

4 The MPSC authorized Consumers to record AFUDC on REP construction work in progress beginning in 2026. Previously, Consumers recognized a current return on construction work in progress.

5 See Notes to the Unaudited Consolidated Financial Statements—Note 8, Income Taxes.

Consumers Gas Utility Results of Operations

Presented in the following table are the detailed changes to the gas utility’s net income available to common stockholders for the three and nine months ended September 30, 2026 versus 2025:

1 For the three months ended September 30, deliveries to end-use customers were 30 Bcf in 2026 and in 2025. For the nine months ended September 30, deliveries to end-use customers were 211 Bcf in 2026 and 213 Bcf in 2025.

2 In 2024, Consumers sold its unregulated ASP business to a non-affiliated company, and the MPSC subsequently approved the application of a portion of the gain as an offset to the revenue deficiency in lieu of additional rate relief during the 12‑month period beginning October 1, 2024, which concluded in September 2025.

3 See Notes to the Unaudited Consolidated Financial Statements—Note 8, Income Taxes.

NorthStar Clean Energy Results of Operations

Presented in the following table are the detailed changes to NorthStar Clean Energy’s net income available to common stockholders for the three and nine months ended September 30, 2026 versus 2025:

1 Net of impairment attributable to noncontrolling interests of $102 million. See Notes to the Unaudited Consolidated Financial Statements—Note 14, Exit Activities and Asset Sales.

Corporate Interest and Other Results of Operations

Presented in the following table are the detailed changes to corporate interest and other results for the three and nine months ended September 30, 2026 versus 2025:

Cash Position, Investing, and Financing

At September 30, 2026, CMS Energy had $579 million of consolidated cash and cash equivalents, which included $102 million of restricted cash and cash equivalents and $26 million of cash and cash equivalents classified as current assets held for sale. At September 30, 2026, Consumers had $325 million of consolidated cash and cash equivalents, which included $68 million of restricted cash and cash equivalents.

Operating Activities

Presented in the following table are specific components of net cash provided by operating activities for the nine months ended September 30, 2026 versus 2025:

1 Non‑cash transactions comprise depreciation and amortization, changes in deferred income taxes and investment tax credits, and other non‑cash operating activities and reconciling adjustments. For CMS Energy, this also includes NorthStar Clean Energy impairment and disposal.

2 Core working capital comprises accounts receivable, accrued revenue, inventories, accounts payable, and accrued rate refunds.

Investing Activities

Presented in the following table are specific components of net cash used in investing activities for the nine months ended September 30, 2026 versus 2025:

Financing Activities

Presented in the following table are specific components of net cash provided by financing activities for the nine months ended September 30, 2026 versus 2025:

Capital Resources and Liquidity

CMS Energy and Consumers expect to have sufficient liquidity to fund their present and future commitments. CMS Energy uses dividends and tax-sharing payments from its subsidiaries and external financing and capital transactions to invest in its utility and non‑utility businesses, retire debt, pay dividends, and fund its other obligations. The ability of CMS Energy’s subsidiaries, including Consumers, to pay dividends to CMS Energy depends upon each subsidiary’s revenues, earnings, cash needs, and other factors. In addition, Consumers’ ability to pay dividends is restricted by certain terms included in its articles of incorporation and potentially by FERC requirements and provisions under the Federal Power Act and the Natural Gas Act. For additional details on Consumers’ dividend restrictions, see Notes to the Unaudited Consolidated Financial Statements—Note 4, Financings and Capitalization—Dividend Restrictions. During the nine months ended September 30, 2026, Consumers paid $672 million in dividends on its common stock to CMS Energy.

Consumers uses cash flows generated from operations, external financing transactions, and the monetization of tax credits, along with stockholder contributions from CMS Energy, to fund capital expenditures, retire debt, pay dividends, and fund its other obligations. Consumers also uses these sources of funding to contribute to its employee benefit plans.

Financing and Capital Resources: CMS Energy and Consumers rely on the capital markets to fund their robust capital plan. Barring any sustained market dislocations or disruptions, CMS Energy and Consumers expect to continue to have ready access to the financial and capital markets and will continue to explore possibilities to take advantage of market opportunities as they arise with respect to future funding needs. Consumers is required to maintain FERC authorization for financings. If access to these markets were to diminish or otherwise become restricted, CMS Energy and Consumers would implement contingency plans to address debt maturities, which could include reduced capital spending.

In 2023, CMS Energy entered into an equity offering program under which it could sell shares of its common stock having an aggregate sales price of up to $1 billion in privately negotiated transactions, in “at the market” offerings, or through forward sales transactions. During the nine months ended September 30, 2026, CMS Energy entered into forward sale agreements and settled all of the remaining forward sale contracts under this program, therefore fully utilizing the program. CMS Energy does not have any remaining capacity available for future issuances under the 2023 equity offering program.

In May 2026, CMS Energy entered into an equity offering program under which it may sell shares of its common stock having an aggregate sales price of up to $3 billion in privately negotiated transactions, in “at the market” offerings, or through forward sales transactions. There have been no sales of securities under this program.

CMS Energy, NorthStar Clean Energy, and Consumers use revolving credit facilities for general working capital purposes and to issue letters of credit. At September 30, 2026, CMS Energy had $736 million of its revolving credit facility available, NorthStar Clean Energy had $74 million available under its revolving credit facility, and Consumers had $1.4 billion available under its revolving credit facilities.

An additional source of liquidity is Consumers’ commercial paper program, which allows Consumers to issue, in one or more placements, up to $500 million in aggregate principal amount of commercial paper notes with maturities of up to 365 days at market interest rates. These issuances are supported by Consumers’ revolving credit facilities. 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, 2026, there were no commercial paper notes outstanding under this program.

For additional details about these programs and facilities, see Notes to the Unaudited Consolidated Financial Statements—Note 4, Financings and Capitalization.

Certain of CMS Energy’s, NorthStar Clean Energy’s, and Consumers’ credit agreements contain covenants that require each entity to maintain certain financial ratios, as defined therein. At September 30, 2026, no default had occurred with respect to any of the financial covenants contained in these credit agreements. Each of the entities was in compliance with the covenants contained in their respective credit agreements as of September 30, 2026, as presented in the following table:

1 Applies to CMS Energy’s revolving credit agreement and letter of credit reimbursement agreement.

2 Applies to NorthStar Clean Energy’s revolving credit agreement.

3 The aggregate book value of the pledged equity interests under the revolving credit agreement was at least two times the aggregate commitment under the revolving credit agreement at September 30, 2026.

4 Applies to Consumers’ revolving credit agreements and certain letter of credit reimbursement agreements.

Outlook

Several business trends and uncertainties may affect CMS Energy’s and Consumers’ financial condition and results of operations. These trends and uncertainties could have a material impact on CMS Energy’s and Consumers’ consolidated income, cash flows, or financial position.

Since 2025, the federal government has taken numerous executive actions related to tariffs and trade, alleviating regulatory burdens, and environmental regulations and enforcement, among other areas of potential impact. Many of these actions require further implementation by federal agencies and departments, and many of these actions are or likely will be subject to judicial review. CMS Energy and Consumers continue to monitor these executive actions and will continue taking steps to deliver consistently on the triple bottom line.

For additional details regarding these and other uncertainties, see Forward-looking Statements and Information; Notes to the Unaudited Consolidated Financial Statements—Note 2, Regulatory Matters, Note 3, Contingencies and Commitments, and Note 8, Income Taxes; and Item 1A. Risk Factors in the 2025 Form 10-K.

Consumers Electric Utility Outlook and Uncertainties

Energy Supply: Consumers’ Electric Supply Plan, its long-term strategy for delivering safe, reliable, affordable, clean, and equitable energy to its customers, is outlined in its IRP and incorporates Consumers’ REP. The Electric Supply Plan is Consumers’ blueprint for compliance with Michigan’s 2023 Energy Law and for advancing sustainability objectives.

Among other things, the 2023 Energy Law:

•increased the renewable energy standard from 15 percent to 50 percent by 2030 and 60 percent by 2035

•established a clean energy standard of 80 percent by 2035 and 100 percent by 2040; low- or zero‑carbon emitting resources, such as nuclear generation and natural gas generation coupled with carbon capture, qualify as clean energy sources under this standard

•created a new energy storage standard, requiring electric utilities to file plans by 2029 to help achieve a statewide target of 2,500 MW; the MPSC Staff has indicated that Consumers’ share of this target is 817 MW

In September 2026, Consumers updated its Electric Supply Plan by filing an IRP with the MPSC. The IRP presents a 20‑year plan designed to meet Michigan’s growing energy needs through a balanced portfolio of natural gas generation, solar, wind, battery and pumped storage, PPAs, and customer programs. The plan is intended to maintain reliability and affordability while achieving the requirements of Michigan’s 2023 Energy Law. The resources and other components included in the IRP are subject to MPSC approval.

To meet these objectives, Consumers is pursuing a multi-faceted strategy:

•Ending the use of coal—Consumers obtained MPSC approval to retire J.H. Campbell in May 2025, totaling 1,407 MW of nameplate capacity, and to recover its remaining book value plus a 9.0‑percent return on equity through regulatory asset treatment upon its retirement. As discussed further below, the retirement of J.H. Campbell is subject to temporary extensions under emergency orders issued by the U.S. Secretary of Energy.

•Resource adequacy and reliability—To maintain reliability during the transition, Consumers purchased the Covert Generating Station, representing 1,200 MW of nameplate capacity, in 2023. Consumers’ updated IRP also includes two proposed natural gas-fueled generating plants totaling approximately 1,375 MW of nameplate capacity. The proposed facilities would include a 456‑MW unit in Bay County, Michigan, and a 919‑MW unit in Genesee County, Michigan. Both facilities are proposed to be placed in service in 2031 and would use existing industrial sites and grid infrastructure, supplemented by necessary natural gas interconnection and related infrastructure improvements.

•PPAs—In September 2025, Consumers entered into a ten‑year PPA with the MCV Partnership for the purchase of up to 1,240 MW of capacity and associated energy from the MCV Facility, effective in June 2030. The IRP also includes a long-term PPA for clean energy intended to support compliance with Michigan’s clean energy standard. As part of the updated IRP, Consumers is seeking MPSC approval of certificates of necessity for the new PPAs.

•Renewable and clean energy expansion—The updated IRP includes more than 19 GW of additional renewable and clean energy resources through 2040, including solar, wind, energy storage, and a proposed long-term PPA for clean energy. These resources would be added over time to support customer needs and compliance with Michigan’s renewable and clean energy standards. The portfolio also incorporates Consumers’ REP, which was approved by the MPSC in September 2025.

•Energy storage investments—Consumers has contracted to purchase 850 MW of capacity from energy storage facilities to be located in Michigan’s Lower Peninsula, with expected commercial operation dates through 2030. The updated IRP contemplates additional energy storage resources and continued use of pumped storage and hydroelectric resources to store and dispatch energy.

•Customer programs—The updated IRP incorporates energy waste reduction, demand response, and other customer-powered energy programs that, collectively, can operate as virtual power plants to reduce energy use, manage peak demand, and lower customer costs. Consumers expects these programs could reduce peak demand by up to 3,100 MW; however, these resources cannot fully replace firm generation needed during extended periods of high demand or when customer resources are unavailable.

Consumers expects to competitively bid new capacity and energy resources, as appropriate, to support a balanced portfolio of renewable, clean, and dispatchable resources. The timing, composition, and cost of the resources proposed in the updated IRP are subject to MPSC approval, future competitive solicitations, permitting, construction, and other developments. Through its IRP, REP, and related customer programs, Consumers seeks to comply with Michigan’s energy requirements while maintaining electric reliability and affordability.

J.H. Campbell Emergency Orders: In May 2025, before the planned closure of J.H. Campbell, the U.S. Secretary of Energy issued an emergency order under Section 202(c) of the Federal Power Act requiring J.H. Campbell to continue operating for 90 days, through August 20, 2025. Subsequently, the U.S. Secretary of Energy issued five additional emergency orders for 90 days each, currently requiring continued operation of J.H. Campbell through November 14, 2026. These orders stated that continued operation of J.H. Campbell was required to meet an energy emergency across MISO’s North and Central regions. Consistent with the Federal Power Act and DOE regulations, the orders authorize Consumers to seek and obtain cost recovery at FERC.

As directed, Consumers has continued to make J.H. Campbell available in the MISO market and, in June 2025, filed a complaint at FERC seeking a modification of the MISO Tariff that would enable Consumers to recover the costs of complying with the emergency orders. Consumers’ complaint sought a mechanism in the MISO Tariff that would allow allocation of those compliance costs across the MISO North and Central regions, consistent with the nature of the energy emergency declared in the U.S. Secretary of Energy orders. In August 2025, FERC granted Consumers’ complaint and ordered MISO to revise its tariff accordingly. MISO submitted a compliance filing with FERC in September 2025 and FERC rejected that filing in March 2026. MISO submitted a revised compliance filing in April 2026 and FERC approval of that filing remains pending.

From the date the first emergency order became effective through September 30, 2026, the amount Consumers expects to seek recovery from FERC associated with the emergency orders, including amounts already requested, is $303 million after applying MISO revenues of $344 million.

In January 2026, Consumers filed a request at FERC seeking recovery and allocation of the net financial impact of complying with the May 2025 emergency order, which was $42 million after applying MISO revenues of $78 million. FERC approval of this filing, which encompasses recovery sought by the joint owners of J.H. Campbell, remains pending. In July 2026, Consumers filed subsequent requests with FERC seeking recovery and allocation of the net financial impact of complying with the August 2025 and November 2025 emergency orders, which totaled $97 million after applying MISO revenues of $144 million.

Consumers intends to seek recovery and allocation through FERC for additional emergency orders consistent with the recovery sought for the 2025 emergency orders. The ultimate financial impact remains subject to the outcome of the FERC proceedings and any future guidance or interpretation.

Following the May 2025 emergency order, several third-party stakeholders, including the Michigan Attorney General, the Organization of MISO States, and a group of environmental and public interest groups, asked the U.S. Secretary of Energy to reconsider the May 2025 emergency order. In July 2025, after the U.S. Secretary of Energy took no action on those requests, several parties filed petitions for review of the May 2025 emergency order in federal court. In September 2026, the D.C. Circuit Court of Appeals issued an order vacating the May 2025 emergency order, finding that the order was unlawful. The ruling addressed the original May 2025 order and did not invalidate subsequent 90‑day emergency orders. Consumers expects the DOE to appeal the D.C. Circuit Court of Appeals’ opinion. Third parties have initiated legal challenges to several subsequent DOE emergency orders, but the litigation of those orders is still underway.

Third parties have also challenged FERC’s August 2025 order granting Consumers’ complaint seeking revisions to the MISO Tariff. That legal challenge is on hold pending the separate legal challenges to the emergency orders. The U.S. Secretary of Energy will likely issue more orders to require the continued operation of J.H. Campbell. While the timing and content of future orders and the outcome of third-party legal challenges are not yet known, Consumers is committed to pursuing cost recovery as provided for under applicable laws, orders, and proceedings.

To ensure appropriate staffing levels at J.H. Campbell, Consumers has implemented retention measures and expects to incur up to $4 million during each 90‑day emergency order period. Consumers will seek recovery of these retention costs from FERC, consistent with rate recovery sought for other costs of complying with the emergency orders. For additional details on this program, see Notes to the Unaudited Consolidated Financial Statements—Note 14, Exit Activities and Asset Sales.

Electric Customer Deliveries and Revenue: Consumers’ electric customer deliveries are seasonal and largely dependent on Michigan’s economy. The consumption of electric energy typically increases in the summer months, due primarily to the use of air conditioners and other cooling equipment. In addition, Consumers’ electric rates, which follow a seasonal rate design, are higher in the summer months than in the remaining months of the year. Each year in June, electric residential customers transition to a summer peak time-of-use rate that allows them to take advantage of lower-cost energy during off-peak times during the summer months. Thus, customers can reduce their electric bills by shifting their consumption from on‑peak to off‑peak times.

Over the next five years, Consumers expects weather-normalized electric deliveries to increase compared to 2025. This outlook reflects strong growth in electric demand, offset partially by the effects of energy waste reduction programs. Actual delivery levels will depend on:

•energy conservation measures and results of energy waste reduction programs

•weather fluctuations

•Michigan’s economic conditions, including data center expansion; utilization, expansion, or contraction of large commercial and industrial facilities; economic development; population trends; electric vehicle adoption; and housing activity

Electric ROA: Michigan law allows electric customers in Consumers’ service territory to buy electric generation service from alternative electric suppliers in an aggregate amount capped at 10 percent of Consumers’ sales, with certain exceptions. At September 30, 2026, electric deliveries under the ROA program were at the 10‑percent limit. Fewer than 300 of Consumers’ electric customers purchased electric generation service under the ROA program.

In 2016, Michigan law established a path to ensure that forward capacity is secured for all electric customers in Michigan, including customers served by alternative electric suppliers under ROA. The law also authorized the MPSC to ensure that alternative electric suppliers have procured enough capacity to cover their anticipated capacity requirements for the four‑year forward period. In 2017, the MPSC issued an order establishing a state reliability mechanism for Consumers. Under this mechanism, if an alternative electric supplier does not demonstrate that it has procured its capacity requirements for the four‑year forward period, its customers will pay a set charge to the utility for capacity that is not provided by the alternative electric supplier.

During 2017, the MPSC issued orders finding that it has statutory authority to determine and implement a local clearing requirement, which requires all electric suppliers to demonstrate that a portion of the capacity used to serve customers is located in the MISO footprint in Michigan’s Lower Peninsula. In 2020, the Michigan Supreme Court affirmed the MPSC’s statutory authority to implement a local clearing requirement on individual electric providers.

In 2020, ABATE and another intervenor filed a complaint against the MPSC in the U.S. District Court for the Eastern District of Michigan challenging the constitutionality of a local clearing requirement. The complaint requested the federal court to issue a permanent injunction prohibiting the MPSC from implementing a local clearing requirement on individual electric providers. In 2023, the U.S. District Court for the Eastern District of Michigan dismissed the complaint. ABATE and the other intervenor filed a claim of appeal of the Eastern District Court’s decision with the U.S. Court of Appeals for the Sixth Circuit.

In January 2025, the Sixth Circuit Court of Appeals issued an opinion finding that the MPSC’s imposition of a local clearing requirement on individual electric suppliers would discriminate against interstate commerce. The Court of Appeals remanded to the District Court for a determination of whether the local clearing requirement discriminated against interstate commerce and whether the MPSC’s regulation survives a strict scrutiny standard, which depends on a determination of whether the local clearing requirement is the only means of achieving the state’s goal of securing reliable energy supply. In January 2025, Consumers filed a petition for rehearing and en banc review with the Sixth Circuit Court of Appeals, requesting the Court to reconsider and reverse the panel’s opinion. In February 2025, the Sixth Circuit Court of Appeals issued an order denying Consumers’ petition for rehearing and en banc review. The case has therefore been remanded to the District Court for the Eastern District of Michigan for consideration of whether the MPSC’s local clearing requirement meets the strict scrutiny standard pursuant to the Court of Appeals’ decision. The remanded proceeding is pending at the Eastern District Court; there is no deadline for decision.

Sale of Hydroelectric Facilities: In September 2025, Consumers signed an agreement to sell its 13 river hydroelectric dams, which are located throughout Michigan, to a non-affiliated company. Additionally, Consumers signed an agreement to purchase power generated by the facilities for 30 years, at a price that reflects the counterparty’s acceptance of the risks and rewards of ownership of the facilities, including FERC licensing obligations. The agreements are contingent upon MPSC and FERC approval, for which Consumers filed in October 2025.

In July 2026, Consumers filed exceptions to the proposal for decision issued in the related regulatory proceeding. The filing proposed a state-administered fund that would be established using all financial compensation mechanism revenues received under the PPA, estimated to total approximately $270 million over the term of the agreement. Under the proposal, the fund would be controlled by the State of Michigan and used to support dam safety improvements, emergency response and remediation efforts, and future decommissioning or license surrender obligations associated with the hydroelectric facilities. The proposal is subject to regulatory review and approval.

In September 2026, Consumers extended its waiver of the statutory deadline applicable to the proceeding to provide additional time for discussions among the parties regarding potential resolution of outstanding matters, resulting in an anticipated MPSC order in November 2026.

In Consumers’ most recent electric rate cases, the MPSC has approved deferred accounting treatment for costs of owning and operating the hydroelectric dams pending and until completion of the transaction. At September 30, 2026, the net book value of the hydroelectric facilities was immaterial.

To ensure necessary staffing at the hydroelectric facilities through the anticipated sale, Consumers has provided current employees at the facilities with a retention incentive program. Subsequently, to ensure continued safe operation of the facilities after the sale, the buyer will offer employment to the current hydroelectric employees for a period of at least a year. The retention incentive benefits are contingent upon MPSC and FERC approval of the sale transaction.

Electric Rate Matters: Rate matters are critical to Consumers’ electric utility business. For additional details on rate matters, see Notes to the Unaudited Consolidated Financial Statements—Note 2, Regulatory Matters and Note 3, Contingencies and Commitments.

2026 Electric Rate Case: In June 2026, Consumers filed an application with the MPSC seeking a rate increase of $481 million made up of two components. First, Consumers requested a $456 million annual rate increase, based on a 10.25‑percent return on equity for the projected 12‑month period ending April 30, 2028. The filing requested authority to recover costs related to new infrastructure investment primarily in distribution system reliability. Second, Consumers requested approval of a $25 million surcharge for the recovery of distribution investments made during the 12 months ended February 28, 2026 that exceeded the rate amounts authorized in accordance with previous electric rate orders.

In October 2026, Consumers revised its requested position to $468 million. Presented in the following table are the components of the revised requested increase in revenue:

The MPSC must issue a final order in this case before or in April 2027.

Depreciation Rate Case: In December 2025, Consumers filed a depreciation case related to its electric and common utility property. In this case, Consumers requested to increase depreciation expense, and its recovery of that expense, by $34 million annually based on December 31, 2024 balances. The case has been paused pending a decision on the proposed sale of Consumers’ hydroelectric facilities.

Electric Environmental Outlook: Consumers’ electric operations are subject to various federal, state, and local environmental laws and regulations. Consumers estimates that it will incur capital expenditures of $245 million from 2026 through 2030 to continue to comply with RCRA, the Clean Air Act, and numerous other environmental regulations. Consumers expects to recover these costs in customer rates, but cannot guarantee this result. Multiple environmental laws and regulations are subject to litigation. Consumers’ primary environmental compliance focus includes, but is not limited to, the following matters.

Air Quality: Multiple air quality regulations apply, or may apply, to Consumers’ electric utility.

MATS, emission standards for electric generating units published by the EPA based on Section 112 of the Clean Air Act, continue to apply to Consumers. In February 2026, the EPA issued a final rule repealing changes made to the MATS rule in 2024. The company has complied, and continues to comply, with the MATS regulation, and the repeal will have minimal impacts on Consumers’ electric generating units. Consumers does not expect MATS to impact its environmental strategy materially.

CSAPR requires Michigan and many other states to improve air quality by reducing power plant emissions that, according to EPA modeling, contribute to ground-level ozone in other downwind states. Consumers complies with this regulation and expects it to have minimal financial and operational impact in the near and/or long term.

In 2015, the EPA lowered the NAAQS for ozone, which could make it more difficult to construct or modify power plants and other emission sources in areas of the country that do not meet the ozone standard. None of Consumers’ fossil-fuel-fired generating units are located in areas designated as nonattainment for this NAAQS. Consumers will continue to monitor developments related to this regulation but does not expect them to have any impact on its generating assets.

In 2024, the EPA published a lower fine particulate matter NAAQS, which could result in newly designated nonattainment areas in Michigan starting in 2026. In 2025, EGLE proposed nonattainment areas for Kalamazoo and Wayne counties, with a decision by the EPA expected in 2027. Consumers does not have any fossil-fuel-fired generating assets in these counties and therefore does not expect this rule to have significant impacts on its existing generating assets or its clean energy strategy. Consumers will continue to monitor NAAQS rulemakings and litigation to evaluate potential impacts to its generating assets.

In January 2026, the EPA published a final rule amending new source performance standards for new, modified, and reconstructed stationary combustion turbines to lower emission limits for NOx. This final rule requires new large simple-cycle turbine units with higher capacity factors to install control equipment for NOx emissions. This rule will apply to any future stationary combustion turbines.

Consumers continues to evaluate these rules in conjunction with other EPA and EGLE rulemakings, litigation, executive orders, treaties, and congressional actions. This evaluation could result in:

•a change in Consumers’ fuel mix

•changes in the types of generating units Consumers may purchase or build in the future

•changes in how certain units are operated, including the installation of additional emission control equipment

•the retirement, mothballing, extended operation, or repowering with an alternative fuel of some of Consumers’ generating units

•changes in Consumers’ environmental compliance costs

•the purchase or sale of emission allowances

Greenhouse Gases: There have been numerous legislative, executive, and regulatory initiatives at the state, regional, national, and international levels that involve the potential regulation and reporting of greenhouse gases. Consumers continues to monitor and comment on these initiatives, as appropriate.

In 2025, the EPA proposed a rule to reconsider the Greenhouse Gas Reporting Program by eliminating the reporting obligations from numerous emission sources, including Consumers’ electric generation sites and distribution equipment. In February 2026, the EPA finalized a portion of the proposed rule that delayed reporting deadlines for reporting year 2025 from March to October 2026 but did not substantively address whether the program would be retained or eliminated. In October 2026, the EPA issued an interim final action extending the deadline once again for reporting year 2025 to March 2027. Reporting of carbon dioxide to the EPA, however, will continue for sources subject to the Clean Air Act Acid Rain Program, which includes Consumers’ fossil-fuel-fired electric generation. This change could result in inconsistent approaches in voluntary greenhouse gas accounting for industrial sources.

In 2024, the EPA finalized its rule under Section 111 of the Clean Air Act to address greenhouse gas emissions from new combustion turbine electric generating units and existing coal-, gas-, and oil‑fueled steam electric generating units. This rule did not address existing combustion turbine electric generating units. In 2025, the EPA issued a proposed rule containing two different pathways to rescind regulation of greenhouse gases from fossil-fueled power plants. In September 2026, the EPA finalized the repeal of portions of the 2024 rule, rescinding carbon capture and storage-based standards, and issued a supplemental proposal to address the remaining parts of the 2024 rule by proposing to rescind all greenhouse gas regulations for fossil-fueled power plants. Consumers does not expect these proposed changes will have any impact on its existing gas- and oil-fueled steam electric generating assets, though it could impact any potential new natural gas-fueled units constructed in the future. Consumers will continue to follow the EPA rules that address greenhouse gas emissions and will continue to evaluate potential impacts to its operations, both present and future.

Increased frequency or intensity of severe or extreme weather events, including those due to climate change, could materially impact Consumers’ facilities, energy sales, and results of operations. Consumers is unable to predict these events; however, Consumers evaluates the potential physical impacts of climate change on its operations, including increased frequency or intensity of storm activity; increased precipitation; increased temperature; and changes in lake and river levels. Consumers released a report addressing the physical risks of climate change on its infrastructure in 2022. Consumers is taking steps to mitigate these risks as appropriate.

While Consumers cannot predict the outcome of changes in U.S. policy or of other legislative, executive, or regulatory initiatives involving the potential regulation or reporting of greenhouse gases, it intends to move forward with its compliance with Michigan’s clean energy requirements, its own sustainability goals, and its emphasis on reliable and resilient electric supply. Litigation, international treaties, executive orders, federal laws and regulations (including regulations by the EPA), and state laws and regulations, if enacted or ratified, could ultimately impact Consumers. Consumers may be required to:

•replace equipment

•install additional emission control equipment

•purchase emission allowances or credits (including potential greenhouse gas offset credits)

•curtail operations or modify existing facility retirement schedules

•arrange for alternative sources of supply

•purchase or build facilities that generate fewer emissions

•mothball, sell, or retire facilities that generate certain emissions

•pursue energy efficiency or demand response measures more swiftly

•take other steps to manage, sequester, or lower the emission of greenhouse gases

Although associated capital or operating costs relating to greenhouse gas regulation or legislation could be material and cost recovery cannot be assured, Consumers expects to recover these costs in rates consistent with the recovery of other reasonable costs of complying with environmental laws and regulations.

CCRs: In 2015, the EPA published a rule regulating CCRs under RCRA. This rule adopts minimum standards for the disposal of non‑hazardous CCRs in CCR landfills and surface impoundments and criteria for the beneficial use of CCRs. The rule also sets out conditions under which some CCR units would be forced to cease receiving CCRs and related process water and to initiate closure. Due to continued litigation, many aspects of the rule have been remanded to the EPA, resulting in more proposed and final rules.

In 2024, the EPA finalized a rule regulating legacy CCR surface impoundments and CCRMUs in response to litigation that exempted inactive impoundments at inactive facilities from the 2015 CCR rule. This 2024 rule adopted minimum standards for impoundments at electric generating facilities that became inactive before the 2015 CCR rule’s effective date. During 2024, owners and operators were required to assess whether an inactive facility contains a legacy surface impoundment and then, for identified locations, proceed with the compliance schedule.

Additionally, the EPA established groundwater monitoring, corrective action, closure, and post-closure care requirements for CCR surface impoundments and landfills closed prior to the effective date of the 2015 CCR rule, but that do not meet the closure technical and performance standards of the 2024 rule. These include inactive CCR landfills that were previously exempted from regulation but that are now considered CCRMUs. Owners are required to conduct an evaluation at active facilities or any inactive facilities with at least one legacy impoundment to identify CCRMUs and determine an appropriate course of action (closure, groundwater treatment, etc.) for each identified unit according to established compliance milestone schedules. In February 2026, the EPA issued a final rule extending the compliance milestone schedule for CCRMUs. This extension does not have a material impact on Consumers’ compliance strategy.

Separately, Congress passed legislation in 2016 allowing participating states to develop permitting programs for CCRs under RCRA Subtitle D. The EPA was granted authority to review these permitting programs to determine if permits issued under the proposed program would be as protective as the federal rule. Once approved, permits issued from an authorized state would serve as the basis for compliance, replacing the requirement to self-certify each aspect of the 2015 CCR rule.

Consumers, with agreement from EGLE, completed the work necessary to initiate closure by excavating CCRs or placing a final cover over each of its relevant CCR units prior to the closure initiation deadline set forth in the 2015 CCR rule. Consumers has historically been authorized to recover in electric rates costs related to coal ash disposal sites that supported power generation. Consumers completed an assessment of inactive facilities as required by the 2024 CCR rule, and did not identify any legacy impoundments. A proposed rule was issued in April 2026 requesting that entities subject to the regulations provide supporting information for proposed changes to requirements related to CCRMUs and other CCR closure obligations. Consumers is evaluating the proposed rule. Any changes to compliance strategy will depend on the content of any final rule issued.

Water: Multiple water-related regulations apply, or may apply, to Consumers.

The EPA regulates cooling water intake systems of existing electric generating plants under Section 316(b) of the Clean Water Act. The rules seek to reduce alleged harmful impacts on aquatic organisms, such as fish. In 2018, Consumers submitted to EGLE studies and recommended plans to comply with Section 316(b) for its coal-fueled units but has not yet received final approval.

The EPA also regulates the discharge of wastewater through its effluent limitation guidelines for steam electric generating plants. Consumers has submitted the appropriate notices of planned participation in compliance with this rule. Consumers has also submitted timely NPDES permit applications and will be working with EGLE to incorporate applicable provisions during the permit renewal process.

Many of Consumers’ facilities maintain NPDES permits, which are vital to the facilities’ operations. Consumers applies for renewal of these permits every five years. Failure of EGLE to renew any NPDES permit, a successful appeal against a permit, a change in the interpretation or scope of NPDES permitting, or onerous terms contained in a permit could have a significant detrimental effect on the operations of a facility.

Protected Wildlife: Multiple regulations apply, or may apply, to Consumers relating to protected species and habitats.

Statutes like the federal Endangered Species Act, the Migratory Bird Treaty Act, and the Bald and Golden Eagle Protection Act of 1940 and changes to permitting may impact operations at Consumers’ facilities. In 2024, the U.S. Fish and Wildlife Service published a final rule providing for bald eagle general permits for qualifying wind farms and electric distribution systems. Consumers has received bald eagle general permits for all its wind farms. While any resulting permitting and monitoring fees and/or restrictions on operations could impact Consumers’ existing and future operations, Consumers does not expect any material changes to its environmental strategy or Electric Supply Plan as a result of this rule.

Additionally, Consumers regularly monitors proposed changes to the listing status of several species within its operational area. A change in species listed under the Endangered Species Act, or under Michigan’s equivalent law, may impact Consumers’ costs to mitigate its impact on protected species and habitats at certain existing facilities as well as siting choices for new facilities.

Other Matters: Other electric environmental matters could have a material impact on Consumers’ outlook. For additional details on other electric environmental matters, see Notes to the Unaudited Consolidated Financial Statements—Note 3, Contingencies and Commitments—Consumers Electric Utility Contingencies—Electric Environmental Matters.

Consumers Gas Utility Outlook and Uncertainties

Gas Deliveries: Consumers’ gas customer deliveries are seasonal. The peak demand for natural gas occurs in the winter due to colder temperatures and the resulting use of natural gas as heating fuel.

Over the next five years, Consumers expects weather-normalized gas deliveries to remain stable relative to 2025. This outlook reflects modest growth in gas demand, offset by the effects of energy waste reduction programs. Actual delivery levels will depend on:

•weather fluctuations

•use by electric power producers

•availability and development of renewable energy sources

•gas price changes

•Michigan’s economic conditions, including population trends and housing activity

•the price or demand of competing energy sources or fuels

•energy efficiency and conservation impacts

Gas Rate Matters: Rate matters are critical to Consumers’ gas utility business. For additional details on rate matters, see Notes to the Unaudited Consolidated Financial Statements—Note 2, Regulatory Matters and Note 3, Contingencies and Commitments.

2025 Gas Rate Case: In December 2025, Consumers filed an application with the MPSC seeking an annual rate increase of $240 million based on a 10.25‑percent authorized return on equity for the projected 12‑month period ending October 31, 2027. In June 2026, Consumers revised its requested increase to $232 million. In October 2026, the MPSC issued an order authorizing an annual rate increase of $139 million, based on a 9.80‑percent authorized return on equity. The new rates become effective in November 2026.

Gas Pipeline and Storage Integrity and Safety: Consumers’ gas operations are governed by federal and state pipeline safety rules, and there are robust processes and procedures in place to maintain compliance with these regulations. The U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration has published rules that revise federal safety standards for gas transmission pipelines and underground storage facilities. Consumers has implemented measures to achieve compliance with the revised regulations. Proposed rules expanding federal gas safety requirements for distribution lines are in the final stages of regulatory review with publication anticipated near the end of 2026. Consumers will continue to monitor developments related to the proposed rules and assess impacts to its gas pipeline and storage assets. While Consumers expects to recover any costs of complying with new regulations in customer rates, it cannot guarantee that result.

Gas Environmental Outlook: Consumers expects to incur response activity costs at a number of sites, including 23 former MGP sites. For additional details, see Notes to the Unaudited Consolidated Financial Statements—Note 3, Contingencies and Commitments—Consumers Gas Utility Contingencies.

Consumers’ gas operations are subject to various federal, state, and local environmental laws and regulations. Multiple environmental laws and regulations are subject to litigation. Consumers’ primary environmental compliance focus includes, but is not limited to, the following matters.

Air Quality: Multiple air quality regulations apply, or may apply, to Consumers’ gas utility.

In 2015, the EPA lowered the NAAQS for ozone, which could make it more difficult to construct or modify natural gas compressor stations and other emission sources in areas of the country that do not meet the ozone standard. Three counties in western Michigan have been designated as “serious” ozone nonattainment. In July 2026, the EPA proposed to redesignate two of the three counties to attainment for the 2015 ozone standard based on updated ozone data. Consumers has one compressor station located in the remaining nonattainment area. Consequently, Consumers is retrofitting equipment at this compressor station to lower NOx emissions.

Following a December 2025 court decision affecting the attainment status of a seven-county area in southeast Michigan, the EPA published a proposal in July 2026 to approve EGLE’s request to redesignate the area to attainment with the 2015 ozone standard. Four of Consumers’ compressor stations are located in these counties, with one station having assets that may be subject to lower NOx emissions if the area were to remain in nonattainment with the 2015 ozone standard. Consumers will continue to monitor the recent court decision’s impact on the seven-county area in southeast Michigan, including resulting agency actions, and the potential impacts to compressor station assets.

Consumers will continue to monitor NAAQS rulemakings and litigation, and evaluate potential impacts to its compressor stations and other applicable natural gas storage and delivery assets.

In 2024, the EPA published a lower fine particulate matter NAAQS, which could result in newly designated nonattainment areas in Michigan starting in 2026. In 2025, EGLE proposed nonattainment areas for Kalamazoo and Wayne counties, with a decision by the EPA expected in 2027. Consumers has one compressor station located in Wayne County and will continue to monitor NAAQS rulemakings and litigation to evaluate potential impacts to the natural gas compressor station assets.

In January 2026, the EPA published a final rule amending new source performance standards for new, modified, and reconstructed stationary combustion turbines to lower emission limits for NOx. This final rule requires control equipment for NOx emissions based on turbine size and utilization subcategories. Consumers’ existing combustion turbines are not impacted by this rule, but the rule could apply to any future installations, modifications, or reconstructions of existing turbines at compressor stations.

Greenhouse Gases: Some interest exists at the various levels of government in regulating greenhouse gases or their sources. Future regulations, if adopted, may involve requirements to reduce methane emissions from Consumers’ gas utility operations and carbon dioxide emissions from customer use of natural gas. Consumers will continue to monitor such potential rules for impacts.

In September 2025, the EPA proposed a rule to reconsider the Greenhouse Gas Reporting Program by removing the natural gas distribution segment from the reporting obligations under the petroleum and natural gas source category, and proposed to delay the reporting obligations until 2034 for the remaining sources in this category. In February 2026, the EPA finalized a portion of the proposed rule that delayed reporting deadlines for reporting year 2025 from March to October 2026 but did not substantively address whether the program would be retained or eliminated. In October 2026, the EPA issued an interim final action extending the deadline once again for reporting year 2025 to March 2027. If this proposal is finalized as proposed, it could result in inconsistent approaches in voluntary greenhouse gas accounting for industrial sources.

Consumers is making voluntary efforts to reduce its gas utility’s methane emissions. Under its Methane Reduction Plan, Consumers has set a goal of net-zero methane emissions from its natural gas delivery system by 2030. Consumers plans to reduce methane emissions from its system by about 80 percent from 2012 baseline levels by accelerating the replacement of aging pipe, rehabilitating or retiring outdated infrastructure, and adopting new technologies and practices. The remaining emissions will likely be offset through clean fuel alternatives or nature-based carbon removal pathways. To date, Consumers has reduced methane emissions by nearly 40 percent.

Consumers has already initiated work in these key areas by continuing to expand its energy waste reduction targets and by offering gas customers the ability to offset their carbon footprint associated with natural gas use by purchasing renewable natural gas or carbon credits associated with Michigan forest preservation. Consumers has commenced operation of two renewable natural gas facilities with another anticipated to reach commercial operation in the fourth quarter. Consumers continues to closely monitor regulatory developments and market conditions as part of its ongoing evaluation of the projects, and will consider future projects with innovative technologies as opportunities arise.

NorthStar Clean Energy Outlook and Uncertainties

In July 2026, the CMS Energy Board of Directors approved a plan to divest certain renewable projects owned by NorthStar Clean Energy and to exit non‑utility renewables development. The projects included in the planned divestment are primarily non‑Michigan-based renewable generation projects totaling over 630 MW of net capacity. CMS Energy launched a sales process for these projects. Certain sales have been completed or are subject to definitive agreements, and CMS Energy is in various stages of negotiations with potential buyers for the remaining projects. At September 30, 2026, the associated assets and liabilities were classified as held for sale and measured at the lower of carrying amount or fair value less costs to sell. CMS Energy also recognized other-than-temporary impairments on its equity method investments and recorded certain restructuring and other associated liabilities. For additional details, see Notes to the Unaudited Consolidated Financial Statements—Note 14, Exit Activities and Asset Sales.

CMS Energy’s primary focus with respect to its ongoing NorthStar Clean Energy business is to maximize the value of Michigan-based generating assets, which include natural gas and solar generation totaling 1,442 MW of capacity.

In June 2026, NorthStar Clean Energy sold a Class A membership interest in HL Solar Holdings to a tax equity investor. HL Solar Holdings is the holding company of:

•a 100‑MW solar generation project in St. Clair County, Michigan, which achieved commercial operation in August 2026

•a 120‑MW solar generation project in Hart Township, Michigan, which achieved commercial operation in October 2026

The nameplate capacity of both projects has been committed under long-term renewable energy purchase agreements. During the nine months ended September 30, 2026, the tax equity investor contributed $24 million and recognized deemed contributions of $166 million associated with the projects being placed into service for tax purposes. In October 2026, the tax equity investor contributed $34 million and will contribute additional amounts in late 2026.

NorthStar Clean Energy retained a Class B membership interest in HL Solar Holdings. Earnings, tax attributes, and cash flows generated by HL Solar Holdings will be allocated among and distributed to the membership classes in accordance with the ratios specified in the associated limited liability company operating agreement; these ratios will change over time and will not be representative of the ownership interest percentages of each membership class. For additional details, see Notes to the Unaudited Consolidated Financial Statements—Note 13, Variable Interest Entities.

Trends, uncertainties, and other matters related to NorthStar Clean Energy that could have a material impact on CMS Energy’s consolidated income, cash flows, or financial position include:

•investment in and financial benefits received from renewable energy and energy storage projects, including changes to tax and trade policy

•delays or difficulties in financing, constructing, and developing projects, including those arising from the performance of contractors, suppliers, or other counterparties

•changes in energy, capacity, and other commodity prices

•changes in market rules, resource accreditation methodologies, and regulatory frameworks, including MISO capacity accreditation requirements

•severe weather events and climate change associated with increasing levels of greenhouse gases

•changes in various environmental laws, regulations, principles, or practices, or in their interpretation

•indemnity obligations assumed in connection with ownership interests in facilities that involve tax equity financing

•representations, warranties, and indemnities provided in connection with sales of assets

•delays or difficulties in obtaining environmental permits

For additional details regarding NorthStar Clean Energy’s uncertainties, see Notes to the Unaudited Consolidated Financial Statements—Note 3, Contingencies and Commitments—Guarantees.

NorthStar Clean Energy Environmental Outlook: NorthStar Clean Energy’s operations are subject to various federal, state, and local environmental laws and regulations. Multiple environmental laws and regulations are subject to litigation. NorthStar Clean Energy’s primary environmental compliance focus includes, but is not limited to, the following matters.

MATS, emission standards for electric generating units published by the EPA based on Section 112 of the Clean Air Act, continue to apply to one of the NorthStar Clean Energy electric generating sites. In February 2026, the EPA issued a final rule repealing changes made to the MATS rule in 2024. The company has complied, and continues to comply, with the MATS regulation, and the repeal will have minimal impacts on NorthStar Clean Energy’s electric generating units. NorthStar Clean Energy does not expect MATS to impact its environmental strategy materially.

CSAPR requires Michigan and many other states to improve air quality by reducing power plant emissions that, according to EPA modeling, contribute to ground-level ozone in other downwind states. NorthStar Clean Energy complies with this regulation and expects it to have minimal financial and operational impact in the near and/or long term.

In 2024, the EPA published a lower fine particulate matter NAAQS, which could result in newly designated nonattainment areas in Michigan starting in 2026. In 2025, EGLE proposed nonattainment areas for Kalamazoo and Wayne counties, with a decision by the EPA expected in 2027. NorthStar Clean Energy has two fossil-fuel-fired generating units in these counties and will continue to monitor NAAQS rulemaking and litigation to evaluate potential impacts to its generating assets.

In January 2026, the EPA published a final rule amending new source performance standards for new, modified, and reconstructed stationary combustion turbines to lower emission limits for NOx. This final rule requires new large simple-cycle turbine units with higher capacity factors to install control equipment for NOx emissions. NorthStar Clean Energy’s existing generation is not impacted by this rule, but the rule could apply to any future generation.

In 2015, the EPA lowered the NAAQS for ozone, which could make it more difficult to construct or modify power plants and other emission sources in areas of the country that do not meet the ozone standard. Following a December 2025 court decision affecting the attainment status of a seven-county area in southeast Michigan, the EPA published a proposal in July 2026 to approve EGLE’s request to redesignate the area to attainment with the 2015 ozone standard. NorthStar Clean Energy, which operates one electric generating station within this area, will continue to monitor the decision’s potential impact.

For additional details regarding the ozone NAAQS, see Consumers Electric Utility Outlook and Uncertainties—Electric Environmental Outlook.

In 2025, the EPA proposed a rule to reconsider the Greenhouse Gas Reporting Program by eliminating the reporting obligations from numerous emission sources. Reporting of carbon dioxide to the EPA, however, will continue for sources subject to the Clean Air Act Acid Rain Program. In February 2026, the EPA finalized a portion of the proposed rule that delayed reporting deadlines for reporting year 2025 from March to October 2026 but did not substantively address whether the program would be retained or eliminated. In October 2026, the EPA issued an interim final action extending the deadline once again for reporting year 2025 to March 2027. This change could result in inconsistent approaches in voluntary greenhouse gas accounting for industrial sources.

In 2024, the EPA finalized its rule under Section 111 of the Clean Air Act to address greenhouse gas emissions from new combustion turbine electric generating units and existing coal-, gas-, and oil‑fueled steam electric generating units. This rule did not address existing combustion turbine electric generating units. In 2025, the EPA issued a proposed rule containing two different pathways to rescind regulation of greenhouse gases from fossil-fueled power plants. In September 2026, the EPA finalized the repeal of portions of the 2024 rule, rescinding carbon capture and storage-based standards, and issued a supplemental proposal to address the remaining parts of the 2024 rule by proposing to rescind all greenhouse gas regulations for fossil-fueled power plants. These actions will not impact NorthStar Clean Energy’s existing facilities. NorthStar Clean Energy will continue to follow the EPA rules that address greenhouse gas emissions and will continue to evaluate potential impacts to its operations, both present and future.

Many of NorthStar Clean Energy’s facilities maintain NPDES permits, which are vital to the facilities’ operations. NorthStar Clean Energy applies for renewal of these permits every five years. Failure of EGLE to renew any NPDES permit, a successful appeal against a permit, a change in the interpretation or scope of NPDES permitting, or onerous terms contained in a permit could have a significant detrimental effect on the operations of a facility.

Other Outlook and Uncertainties

Litigation: CMS Energy, Consumers, and certain of their subsidiaries are parties to various litigation matters, as well as to administrative proceedings before various courts and governmental agencies, arising in the ordinary course of business. For additional details regarding certain legal matters, see Notes to the Unaudited Consolidated Financial Statements—Note 2, Regulatory Matters, Note 3, Contingencies and Commitments, and Note 8, Income Taxes.

New Accounting Standards

For details regarding new accounting standards issued but not yet effective, see Notes to the Unaudited Consolidated Financial Statements—Note 1, New Accounting Standards.