CMS-PB 10-K & 10-Q changes, risk factors and insider trading

Michigan law allows electric customers in Consumers’ service territory to buy electric generation service from alternative electric suppliers in an aggregate amount capped at ten10 percent of Consumers’ sales, with certain exceptions. The proportion of Consumers’ electric deliveries under the ROA program and on the ROA waiting list is over ten10 percent. Consumers’ rates are regulated by the MPSC, while alternative electric suppliers charge market-based rates, putting competitive pressure on Consumers’ electric supply. Groups are advocating for an ROA-like community solar systemprogram that allows third parties to sell directly to customers and offer them a regulated bill credit. If the amount of ROA limit weresales increased, this new ROA-likeROA‑like community solar systemprogram were allowed, or electric generation service in Michigan were further deregulated, it could have a material adverse effect on CMS Energy and Consumers.

Michigan law allows customers to use distributed energy resources for their electric energy needs. These distributed energy resources are connected to Consumers’ electric grid. The 2023 Energy Law increases the cap on Consumers’ distributed generation program to ten10 percent of utilities’ peak loads. It also specifies an inflow and outflow rate method that must be implemented by the MPSC and provides federal funding for low-income distributed generation.MPSC. FERC policy allows many customer-owned behind-the-meter and grid-connected distributed energy resources to participate in and receive revenue from wholesale electricity markets, as governed by evolving wholesale market rules subject to FERC oversight. Increased customer use of distributed energy resources could result in a reduction of Consumers’ electric sales. Third parties’ operations of distributed energy resources could also potentially have a negative impact on the stability of the grid. An increase in customers’ use of distributed energy resources, and the rate structure for distributed energy resources customers’ use of Consumers’ system and Consumers’ purchases of their excess generation, could have a material adverse effect on CMS Energy and Consumers.

Orders of the MPSC could limit recovery of costs of providing service. These orders could also result in adverse regulatory treatment of other matters. For example, MPSC orders could prevent or curtail Consumers from shutting off non‑paying customers, could prevent or limit the implementation of an electric or gas revenue mechanism, or could penalize Consumers for not meeting service and reliability standards. Regulators could face competitive or political pressures to avoid or limit rate increases for a number of reasons, including affordability concerns, economic downturn in the state,downturn, reliability and economic justice concerns, or decreased customer base, among others.

Utility regulation, state or federal legislation, regulation, and compliance could have a material adverse effect on CMS Energy’s and Consumers’ businesses.

CMS Energy and certain of its subsidiaries, including Consumers, are subject to, or affected by, extensive utility regulation and state and federal legislation,legislation and regulation, including through application of policies and rules of numerous state and federal agencies and governmental entities. If it were determined that CMS Energy or Consumers failed to comply with applicable laws and regulations or with applicable tariff provisions, they could become subject to fines, penalties, refund or disgorgement orders, or disallowed costs, or be required to implement additional compliance, cleanup, or remediation programs, the cost of which could be material. CMS Energy and Consumers cannot predict the impact of new laws, rules, regulations, tariffs, principles, orders, or practices by federal or state agencies or wholesale electricity market operators, or challenges or changes to present laws, rules, regulations, tariffs, principles, orders, or practices and the interpretation of any adoption or change. Furthermore, any state or federal legislationlegislation, regulation, order, or other action concerning CMS Energy’s or Consumers’ operations could also have a material adverse effect.

FERC, through NERC and its delegated regional entities, oversees reliability of certain portions of the electric grid. CMS Energy and Consumers cannot predict the impact of the DOE or FERC orders or actions of NERC and its regional entities on electric system reliability. Additionally, natural gas pipeline infrastructure has recently been under scrutiny following disruptions related to extreme weather and cyber incidents. Additional regulation in this area could adversely affect Consumers’ gas operations.

Consumers has announced a long-term strategy for delivering clean, reliable, resilient, and affordable energy, including a plan to end the use of coal in owned generation in 2025, and other subsidiaries of CMS Energy have plans to develop and operate clean energy assets. The MPSC, FERC, other regulatory authorities, or other third parties may prohibit, delay, or impair some or all of CMS Energy’s and Consumers’ planned acquisitions or development of owned or purchased electric generation and storage capacity. Consumers’ planned electric generation capacity, including renewable generation or storage projects, may be adversely impacted by interconnection delays at MISO or in the footprints of other regional transmission organizations, and/or by interconnection costs. CMS Energy and Consumers and its contractors may be unable to acquire, site, construct timely, and/or permit generation and storage capacity, including some or all of the generation and storage capacity proposed in Consumers’ plan. CMS Energy and Consumers’ ability to implement their plans may be affected by environmental regulations, global supply chain disruptions, import tariffs, and changes in the cost, availability, and supply of generation and storage capacity. While CMS Energy and Consumers continue to advocate for advances in commercially available technologies required to reduce or eliminate greenhouse gases on a cost-effective basis at scale, such advances are largely outside of CMS Energy’s and Consumers’ control. Advancements in technology related to items such as battery storage, carbon capture/storage, and electric vehicles may not become commercially available or economically feasible as projected. Customer programs such as energy efficiency and demand response may not realize the projected levels of customer participation.

Consumers has also announced its electric Reliability Roadmap. The Reliability Roadmap includes larger investments in grid hardening, distribution capacity, and automation to deliver better than median reliability to customers given increasingly severe weather and customer adoption of new technologies. The MPSC or other third parties may prohibit, delay, or impair the Reliability Roadmap and some or all of the associated capital investments. Consumers’ ability to implement its plan may be affected by global supply chain disruptions and/or workforce availability.

CMS Energy and Consumers are required to make judgments regarding the potential tax effects of various financial transactions and results of operations in order to estimate their obligations to taxing authorities. The tax obligations include income taxes, real estate taxes, sales and use taxes, employment-related taxes, and ongoing issues related to these tax matters. The judgments include determining reserves for potential adverse outcomes regarding tax positions that have been taken and may be subject to challenge by the IRS and/or other taxing authorities. Unfavorable settlements of any of the issues related to these reserves or other tax matters at CMS Energy or Consumers could have a material adverse effect. Additionally, changes in federal, state, or local tax rates or other changes in tax laws could have adverse impacts. TheIn July 2025, President Trump signed the OBBBA into law. CMS Energy and Consumers evaluated the provisions of the OBBBA and concluded that the legislation is not expected to have a material impact on their respective financial statements. This conclusion is subject to change inas administrationadditional andguidance theor expiringinterpretations taxbecome cuts in the TCJA could result in changes to the renewable energy tax credits enacted in the Inflation Reduction Act of 2022. These changes could impact CMS Energy’s and Consumers’ clean energy efforts.available.

CMS Energy and Consumers have interests in fossil-fuel-fired power plants, other types of power plants, and natural gas systems that emit greenhouse gases. Federal, state, and local environmental lawslaws, regulations and rules,orders, as well as international accords and treaties, could require CMS Energy and Consumers to install additional equipment for emission controls, undertake heat-rate improvement projects, purchase carbon emissions allowances, curtail or extend operations, invest in generating capacity with fewer carbon dioxide emissions, or take other significant steps to manage or lower the emission of greenhouse gases. Similarly, Consumers could be restricted from constructing natural gas infrastructure due to potential environmental regulations, which could require more costly alternatives.

•impairment of CMS Energy’s or Consumers’ reputation due to their greenhouse gas or other emissions and public perception of their response to potential environmental regulations, rules, orders, and legislation

•implementation of state or federal environmental justice requirements Consumers expects to collect fully from its customers, through the ratemaking process, expenditures incurred to comply with environmental regulations, but cannot guarantee this outcome. There is not currently a FERC-approved MISO Tariff for recovery of compliance costs associated with the continued operation of J.H. Campbell, and continued operation of J.H. Campbell is not contemplated in Consumers’ current MPSC rates or rate filings at the MPSC. Consumers is pursuing cost recovery at FERC but cannot predict the outcome of those efforts or the impact of other executive actions. If Consumers were unable to recover these expenditures from customers in rates, CMS Energy or Consumers could be required to seek significant additional financing to fund these expenditures.

A variety of technological tools and systems, including both company-owned information technologyIT and technological services provided by outside parties, support critical functions. The failure of these technologies, including backup systems, or the inability of CMS Energy and Consumers to have these technologies supported, updated, expanded, or integrated into other technologies, could hinder their business operations.

Assets, equipment, and personnel of CMS Energy and Consumers, including electric and gas delivery systems, power plants, gas infrastructure including storage facilities, wind energy or solar equipment, energy products, energy storage assets, vehicle fleets and equipment, other assets, or employees and contractors, could be involved in incidents, failures, or accidents that result in injury, loss of life, or property loss and damage to customers, employees, or the public. Although CMS Energy and Consumers have insurance coverage for many potential incidents (subject to deductibles, limitations, and self-insuranceself‑insurance amounts that could be material), depending upon the nature or severity of any incident, failure, or accident, CMS Energy or Consumers could suffer financial loss, reputational damage, and negative repercussions from regulatory agencies or other public authorities, even where there is no legal liability.

Natural disasters, severe weather, extreme temperatures, wildfires, fires, smoke, flooding, wars, terrorist acts, civil unrest, vandalism, theft, cyber incidents, government shutdowns, pandemics, and other catastrophic events could result in severe damage to CMS Energy’s and Consumers’ assets beyond what could be recovered through insurance policies (which are subject to deductibles, limitations, and self-insuranceself‑insurance amounts that could be material), could require CMS Energy and Consumers to incur significant upfront costs, and could severely disrupt operations, resulting in loss of service to customers. There is also a risk that regulators could, after the fact, conclude that Consumers’ preparedness or response to such an event was inadequate and take adverse actions as a result.

Adverse economic conditions or financial difficulties experienced by counterparties with whom CMS Energy and Consumers do business could impair the ability of these counterparties to pay for CMS Energy’s and Consumers’ services and/or fulfill their contractual obligations, including performance and payment of damages. CMS Energy and Consumers depend on these counterparties to remit payments and perform contracted services in a timely and adequate fashion. In addition, any delay or default in payment or performance, including inadequate performance, of contractual obligations (such as contractual obligations by third parties to purchase utility services, perform work, supply equipment, provide services, and meet related specifications or requirements), could have a material adverse effect on CMS Energy and Consumers.

A work interruption or other union actions could adversely affect CMS Energy and Consumers.

At December 31, 2024,2025, unions represent 4645 percent of Consumers’ employees and 22 percent of NorthStar Clean Energy’s employees. Consumers’ union agreements expire in 2025.2030 and the majority of NorthStar Clean Energy’s represented employees have an agreement that expires in 2029. If these employees were to engage in a strike, work stoppage, or other slowdown, CMS Energy or Consumers could experience a significant disruption in its operations and higher ongoing labor costs.

CMS Energy’s and Consumers’ purpose is to provide safe, reliable, affordable, clean, and equitable energy in service of their customers. In support of this purpose, CMS Energy and Consumers couple digital transformation with the “CE Way,” a lean operating modelsystem designed to improve safety, quality, cost, delivery, and employee morale.

CMS Energy and Consumers also place a high priority on customer value and on providing areliable, hometownaffordable, customerand experience.equitable energy in service of their customers. Consumers’ customer-driven investment program is aimed at improving safety and increasing electric and gas reliability.

In Septemberthe 2023,electric rate case it filed with the MPSC in June 2025, Consumers filedupdated its Reliability Roadmap, an update to its previous Electric Distribution Infrastructure Investment Plan filed in 2021, with the MPSC. The Reliability Roadmap outlines a five-yearfive‑year strategy to improve Consumers’ electric distribution system and the reliability of the grid. The plan proposes thespending followingthrough spending2029 for projects designed to reduce the number and duration of power outages to customers through investment in infrastructure upgrades, vegetation management, and grid modernization:modernization. Consumers has requested rate recovery of the investments needed to achieve the Reliability Roadmap’s key objectives in its electric rate cases.

•replacement of coal-fueled generation and PPAs with a cost-efficient and reliable mix of renewable energy, less-costly dispatchable generation sources, and energy waste reduction and demand response programs

While inflationary pressures and tariffs could impact supply chain availability and pricing, CMS Energy and Consumers haveare experienced some supply chain disruptions and inflationary pressures, they have takentaking steps to help mitigate the impact on their ability to provide safesafe, reliable, affordable, clean, and reliableequitable energy in service toof their customers.

CMS Energy and Consumers continue to focus on opportunities to protect the environment and reduce their carbon footprint from owned generation. CMS Energy, including Consumers, has decreased its combined percentage of electric supply (self-generated and purchased) from coal by 2324 percentage points since 2015. Additionally, as a result of actions already taken through 2024,2025, initial measurementpreliminary data indicates Consumers has:

•reduced carbon dioxide emissions from owned generation by more thannearly 30 percent since 2005

•reduced methane emissions by nearlymore 30than 40 percent since 2012

•reduced the volume of water used to generate electricity by morenearly than 5060 percent since 2012

•reduced landfill waste disposal by more than two2 million tons since 1992

•reduced mercury emissions by more than 90 percent since 2007 Presented in the following illustration are Consumers’ reductions in these emissions:

In November 2023, Michigan enacted the 2023 Energy Law, which among other things:

•raisedincreased the renewable energy standard from the15 present 15‑percent requirement to 50 percent by 2030 and 60 percent by 2035; renewable energy generated anywhere within MISO can be applied to meeting this standard, with certain limitations

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

•created a new energy storage standardstandard, that requiresrequiring electric utilities to file plans by 2029 to obtainhelp new energy storage that will contribute toachieve a Michiganstatewide target of 2,500 MW based on their pro rata share

•theConsumers’ co-locationupdates to its Renewable Energy Plan include up to 9,000 MW of batteryboth purchased and owned solar energy storageresources withand itsup renewableto 4,000 MW of wind energy assets to optimize those assetsresources. Coupled with updates to theits Cleanintegrated Energyresource Plan,plan, these actions will enableposition Consumers to achieve 60 ‑percent renewable energy by 2035 and 100 ‑percent clean energy by 2040, and will also contribute to Consumers’ achievement of the net-zeroemissions emissionsreductions goals discussed below.

Net-zeroUnder its Methane Reduction Plan, Consumers has set a goal of net-zero methane emissions from its natural gas delivery system by 2030: Under its Methane Reduction Plan,2030. Consumers plans to reduce methane emissions from its system by about 80 percent,percent from 2012 baseline levels,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 bythrough purchasingclean and/fuel alternatives or producingnature-based renewablecarbon naturalremoval gas.pathways. To date, Consumers has reduced methane emissions by nearlymore 30than 40 percent.

Net-zeroConsumers has also set a goal to reduce customer greenhouse gas emissions target for the entire business by 2050: This goal incorporates greenhouse gas emissions from Consumers’ natural gas delivery system, including suppliers and customers, and has an interim goal of reducing customer emissions by 25 percent by 2035. Consumers expects to meet this goal through carbon offset measures, renewable natural gas, energy efficiency and demand response programs, and the adoption of cost-effective emerging technologies once proven and commercially available.

Additionally, to advance its environmental stewardship in Michigan and to minimize the impact of future regulations, Consumers set the following goals for the five-yearfive‑year period 2023 through 2027:

•to enhance, restore, or protect 6,500 acres of land through 2027; Consumers hassurpassed this goal during the three‑year period 2023 through 2025 and enhanced, restored, or protected more than 5,0006,700 acres of land towards this goal

•to reduce water usage by 1.7 billion gallons through 2027; Consumers hashad reduced water usage by more than 1.31.9 billion gallons towards this goal

•to annually divert a minimum of 90 percent of waste from landfills (through waste reduction, recycling, and reuse); during 2024,2025, Consumers’ rate of waste diverted from landfills was 9293 percent CMS Energy and Consumers are monitoring numerous legislative, policy, executive, and regulatory initiatives, including those related to regulateregulation and reportreporting of greenhouse gases, and related litigation. While CMS Energy and Consumers cannot predict the outcome of these matters, which could affect them materially, they intend to continue to move forward with theira cleantriple-bottom-line approach that focuses on people, planet, and lean strategy.prosperity.

In 2024,2025, CMS Energy’s net income available to common stockholders was $993$1.1 million,billion, and diluted EPS were $3.33.$3.53. This compares with net income available to common stockholders of $877$993 million and diluted EPS of $3.01$3.33 in 2023.2024. In 2024,2025, higher gas and electric sales, due primarily to favorable weather, and electric and gas rate increases were offset partially by higher interest charges and increased depreciation and property taxes, reflecting higher capital spending.spending, and higher interest charges. A more detailed discussion of the factors affecting CMS Energy’s and Consumers’ performance can be found in the Results of Operations section that follows this Executive Overview.

•completedexperienced success with the finalunderground phasepower ofline thepilot Mid-Michiganprogram Pipelinein project,early replacing2025, with pilot areas seeing 100‑percent reduction in storm-related outages and upgradingimproved 55customer miles of natural gas transmission pipeline in five Michigan counties, ensuring safe and reliable gas flow to homes and businesses prior to the winter seasonsatisfaction CMS Energy and Consumers will continue to utilize the CE Way to enable them to achieve world class performance and positively impact the triple bottom line. Consumers’ investment plan and the regulatory environment in which it operates also drive its ability to impact the triple bottom line.

Investment Plan: Over the next five years, Consumers expects to make significant expenditures on infrastructure upgrades, replacements, and clean generation. While it has a large number of potential investment opportunities that would add customer value, Consumers has prioritized its spending based on the criteria of enhancing public safety, increasing reliability, maintaining affordability for its customers, and advancing its environmental stewardship. Consumers’ investment program, which is subject to approval through general rate case and other MPSC proceedings, is expected to result in annual rate-base growth of more than eight8 percent. This rate-base growth, together with cost-control measures, should allow Consumers to maintain affordable customer prices.

Of this amount, Consumers plans to spend $14.8$8.8 billion on electric generation, which includes solar, wind, and natural gas-fueled generation, as well as energy storage. Consumers also expects to spend $15.3 billion over the next five years primarily to maintain and upgrade its electric distribution systems and gas infrastructure in order to enhance safety and reliability, improve customer satisfaction, reduce energy waste on those systems, and facilitate its clean energy transformation. Electric distribution and other projects comprise $8.5$8.6 billion primarily to strengthen circuits and substations, replace poles, and interconnect clean energy resources. The gas infrastructure projects comprise $6.3$6.7 billion to sustain deliverability, enhance pipeline integrity and safety, and reduce methane emissions. Consumers also expects to spend $5.2 billion on clean generation, which includes investments in wind, solar, and hydroelectric generation resources.

2024 Electric Rate Case: In MayMarch 2024,2025, the MPSC issued an order authorizing an annual rate increase of $176 million, which is inclusive of a $22 million surcharge for the recovery of distribution investments made in 2023 that exceeded the rate amounts authorized in accordance with previous electric rate orders. The approved rate increase is based on a 9.90‑percent authorized return on equity. The new rates became effective in April 2025 2025 Electric Rate Case: In June 2025, Consumers filed an application with the MPSC seeking a rate increase of $325$460 million, made up of two components. First, Consumers requested a $303$436 million annual rate increase, based on a 10.25‑percent authorized return on equity for the projected 12‑month period ending FebruaryApril 28,30, 2026.2027. The filing requested authority to recover costs related to new infrastructure investment primarily in distribution system reliability and cleaner energy resources.reliability. Second, Consumers requested approval of a $22$24 million surcharge for the recovery of distribution investments made induring 2023the 12 months ended February 28, 2025 that exceeded the ratesrate amounts authorized in accordance with previous electric rate orders. In October 2024,2025, Consumers revised its requested increase to $277$447 million, primarilywhich includes the $24 million surcharge to reflectrecover thedeferred removaldistribution of projected capital investments associated with certain solar facilities that Consumers incorporated into its amended renewable energy plan.investments. The MPSC must issue a final order in this case before or in MarchApril 2025.2026.

2024 Gas Rate Case: In DecemberSeptember 2024, Consumers filed an application with2025, the MPSC seekingissued an order authorizing an annual rate increase of $248$157.5 millionmillion, based on a 10.259.80‑percent authorized return on equity for the projected 12‑month period ending October 31, 2026.equity. The MPSCnew mustrates issuebecame a final ordereffective in this case before or in OctoberNovember 2025.

CMS Energy is an energy company operating primarily in Michigan. It is the parent holding company of several subsidiaries, including Consumers, an electric and gas utility, and NorthStar Clean Energy, primarily a domestic independent power producer and marketer. Consumers’ electric utility operations include the generation, purchase, distribution, and sale of electricity, and Consumers’ gas utility operations include the purchase, transmission, storage, distribution, and sale of natural gas. Consumers’ customer base consists of a mix of primarily residential, commercial, and diversified industrial customers. NorthStar Clean Energy, through its subsidiaries and equity investments, is engaged in domestic independent power production, including the development and operation of renewable generation,production and the marketing of independent power production.

Planet: The planet element of the triple bottom line represents CMS Energy’s and Consumers’ commitment to protect the environment. This commitment extends beyond compliance with various state and federal environmental, health, and safety laws and regulations. Management considers climateextreme changeweather and other environmental risks in strategy development, business planning, and enterprise risk management processes.

CMS Energy and Consumers continue to focus on opportunities to protect the environment and reduce their carbon footprint from owned generation. CMS Energy, including Consumers, has decreased its combined percentage of electric supply (self-generated and purchased) from coal by 24 percentage points since 2015. Additionally, as a result of actions already taken through 2025, preliminary data indicates Consumers has:

•reduced methane emissions by more thannearly 40 percent since 2012

•expanded the statutory cap on distributed generation resources to 10 percent of the electric utility’s five‑year average peak load Consumers’ Electric Supply Plan, its long-term strategy for delivering safe, reliable, affordable, clean, and equitable energy to its customers, is outlined in its integrated resource planIRP and incorporates Consumers’ Renewable Energy Plan.REP. The Electric Supply Plan is Consumers’ blueprint for compliance with Michigan’s 2023 Energy Law and for advancing sustainability objectives.

To continue providing controllable sources of electricity to customers, Consumers purchased the Covert Generating Station, representing 1,200 MW of nameplate capacity, in 2023 and has solicited additional capacity from controllable sources of electricity to customers. In March 2026, Consumers announced that the integratednext resourceIRP planfiling thatplanned itfor expects to file in JuneSeptember 2026 willwould include an all-of-the-above approach to electric supply, with over 13 GW in expanded renewables and clean energy resources including solar, battery storage, and wind, supported by two new natural gas-fueled electric generating plants totaling approximately 1,500 MW of capacity. These new units, which would be developed on existing sites in Bay and Genesee Counties, Michigan, would enhance reliability and maintain affordability.

Consumers’ updates to its Renewable Energy PlanREP include up to 9,000 MW of both purchased and owned solar energy resources and up to 4,000 MW of wind energy resources. Coupled with updates to its integrated resource plan,IRP, these actions position Consumers to achieve 60‑percent renewable energy by 2035 and 100‑percent clean energy by 2040, and will also contribute to Consumers’ achievement of the emissions reductions goals discussed below.

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 more thannearly 40 percent.

For the threesix months ended MarchJune 31,30, 2026, CMS Energy’s net income available to common stockholders was $338$455 million and diluted EPS were $1.10.$1.47. This compares with net income available to common stockholders of $302$500 million and diluted EPS of $1.01$1.67 for the threesix months ended MarchJune 31,30, 2025. During the threesix months ended MarchJune 31,30, 2026, electric and gas rate increases and higher earnings at NorthStar Clean Energy were offset partiallyby bythe absence of gains on extinguishment of debt, higher service restoration costscosts, and increased depreciation and property taxes, reflecting higher capital spending. A more detailed discussion of the factors affecting CMS Energy’s and Consumers’ performance can be found in the Results of Operations section that follows this Executive Overview.

CMS Energy and Consumers remain committed to delivering safe, reliable, affordable, clean, and equitable energy in service of their customers and positively impacting the triple bottom line of people, planet, and prosperity. During 2025,2025 and the first half of 2026, CMS Energy and Consumers:

•reached an agreement under Consumers’ large-load tariff with a new data center expected to add more than 1 GW of incremental load growth in our service territory, supporting long-term sales growth and delivering economic benefits for Michigan

20252026 Electric Rate Case: In MarchJune 2026, Consumers filed an application with the MPSC issuedseeking an order stating an annuala rate increase of $277$481 million,million made up of two components. First, Consumers requested a $456 million annual rate increase, based on a 9.9010.25‑percent authorized return on equity.equity for the projected 12‑month period ending April 30, 2028. The MPSCfiling alsorequested approvedauthority deferredto accountingrecover treatmentcosts forrelated $22to millionnew infrastructure investment primarily in distribution system reliability. Second, Consumers requested approval of incremental costs associated with accelerated low-voltage distribution vegetation management and $15 million of ERP implementation costs. Additionally, the MPSC approved a $24$25 million surcharge for the recovery of distribution investments made during the 12 months ended February 28, 20252026 that exceeded the rate amounts authorized in accordance with previous electric rate orders. The newMPSC ratesmust becomeissue effectivea final order in Maythis 2026.case before or in April 2027.

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. The MPSC must issue a final order in this case before or in October 2026.

Presented in the following table is a summary of changes to net income available to common stockholders for the three and six months ended MarchJune 31,30, 2026 versus 2025:

Presented in the following table are the detailed changes to the electric utility’s net income available to common stockholders for the three and six months ended MarchJune 31,30, 2026 versus 2025:

1Deliveries1For the three months ended June 30, deliveries to end-use customers were 9.18.9 billion kWh in 2026 and 9.0in 2025. For the six months ended June 30, deliveries to end-use customers were 18.0 billion kWh in 2026 and in 2025.

Presented in the following table are the detailed changes to the gas utility’s net income available to common stockholders for the three and six months ended MarchJune 31,30, 2026 versus 2025:

Presented in the following table are the detailed changes to NorthStar Clean Energy’s net income available to common stockholders for the three and six months ended MarchJune 31,30, 2026 versus 2025:

Presented in the following table are the detailed changes to corporate interest and other results for the three and six months ended MarchJune 31,30, 2026 versus 2025:

Presented in the following table are specific components of net cash provided by operating activities for the threesix months ended MarchJune 31,30, 2026 versus 2025:

Presented in the following table are specific components of net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 versus 2025:

Presented in the following table are specific components of net cash provided by (used in) financing activities for the threesix months ended MarchJune 31,30, 2026 versus 2025:

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 threesix months ended MarchJune 31,30, 2026, Consumers paid $308$448 million in dividends on its common stock to CMS Energy.

In 2023, CMS Energy entered into an equity offering program under which it maycould 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 threesix months ended MarchJune 31,30, 2026, CMS Energy entered into forward sale agreements for approximately 6.4 million shares at a weighted average initial forward price of $75.63 per share. During the same period, CMS Energy settled all of the remaining forward sale contracts under this program by issuing approximately 1.96.5 million shares at a weighted average price of $75.28$75.80 per share, resulting in net proceeds of $142$495 million. FollowingCMS theseEnergy transactions,has outstandingfully forwardutilized contractsthe program and does not have any remaining capacity available for future issuances under the program2023 haveequity anoffering aggregate sales price of $353 million, maturing August 2027.program.

CMS Energy, NorthStar Clean Energy, and Consumers use revolving credit facilities for general working capital purposes and to issue letters of credit. At MarchJune 31,30, 2026, CMS Energy had $715 million of its revolving credit facility available, NorthStar Clean Energy had $197$163 million available under its revolving credit facility, and Consumers had $1.4$1.3 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 MarchJune 31,30, 2026, there were no commercial paper notes outstanding under this program.

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 MarchJune 31,30, 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 MarchJune 31,30, 2026, as presented in the following table:

3The 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 MarchJune 31,30, 2026.

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 integrated resource planIRP and incorporates Consumers’ Renewable Energy Plan.REP. The Electric Supply Plan is Consumers’ blueprint for compliance with Michigan’s 2023 Energy Law and for advancing sustainability objectives.

•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 Consumers’ integrated resource planning process provides a clear path toward these goals. Consumers expects to file updates to its integrated resource planIRP in JuneSeptember 2026 to reinforce and expand that pathway, while recent updates to the Renewable Energy PlanREP—approved by the MPSC in September 2025—position Consumers to achieve 60‑percent renewable energy by 2035 and 100‑percent clean energy by 2040.

•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. Additionally, in September 2025, Consumers entered into a new 10ten‑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 June 1, 2030. The agreement is subject to MPSC approval, which will be requested as part of the next IRP filing.

In March 2026, Consumers announced that the integratednext resourceIRP planfiling thatplanned itfor expects to file in JuneSeptember 2026 willwould include an all-of-the-above approach to electric supply, with over 13 GW in expanded renewables and clean energy resources including solar, battery storage, and wind, supported by two new natural gas-fueled electric generating plants totaling approximately 1,500 MW of capacity. These new units, which would be developed on existing sites in Bay and Genesee Counties, Michigan, would enhance reliability and maintain affordability.

•Renewable expansion—Recent Renewable Energy PlanREP updates include up to 4,000 MW of wind energy resources and up to 9,000 MW of both purchased and owned solar energy resources, of which 1,060 MW will support Consumers’ voluntary green pricing program.

Presented in the following illustration is the aggregate renewable capacity that Consumers expects to add to its portfolio through PPAs and owned generation under its integrated resource plan,IRP, voluntary green pricing program, and Renewable Energy PlanREP updates:

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 has issued threefour additional emergency orders for 90 days each, currently requiring continued operation of J.H. Campbell through MayAugust 18,16, 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 obtain cost recovery at FERC.

For theall secondsubsequent emergency order period through March 31, 2026, the net financial impact of compliance was $138 million after applying MISO revenues of $143 million.orders, Consumers willintends to seek recovery ofand theseallocation compliancethrough costs at a later date,FERC consistent with ratethe recovery sought for the May 2025 emergency order. The ultimate financial impact remains subject to the outcome of the FERC proceedingproceedings and any future guidance or interpretation.

•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 MarchJune 31,30, 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.

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. Timing of the regulatory review process is uncertain and could extend 12 to 18 months or longer. 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 March 31, 2026, the net book value of the hydroelectric facilities was immaterial.

2026 Electric Rate Case: In MarchJune 2026, Consumers filed an application with the MPSC issuedseeking an order stating an annuala rate increase of $277$481 million,million made up of two components. First, Consumers requested a $456 million annual rate increase, based on a 9.9010.25‑percent authorized return on equity.equity for the projected 12‑month period ending April 30, 2028. The MPSCfiling alsorequested approvedauthority deferredto accountingrecover treatmentcosts forrelated $22to millionnew infrastructure investment primarily in distribution system reliability. Second, Consumers requested approval of incremental costs associated with accelerated low-voltage distribution vegetation management and $15 million of ERP implementation costs. Additionally, the MPSC approved a $24$25 million surcharge for the recovery of distribution investments made during the 12 months ended February 28, 20252026 that exceeded the rate amounts authorized in accordance with previous electric rate orders. The new rates become effective in May 2026.

In 2015, the EPA lowered the NAAQS for ozone and made 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. Three counties in western Michigan have been designated as “serious” ozone nonattainment. Based on recent air-quality data, EGLE has submitted a Clean Data Determination for two of those counties, a step toward redesignating those two counties to ozone attainment. The EPA has proposed approving the Clean Data Determination. Separately, a December 2025 court decision vacated the EPA’s 2023 redesignation of a seven‑county area in southeast Michigan from moderate ozone nonattainment to attainment. In May 2026, EGLE submitted to the EPA an addendum to its request to redesignate the southeast Michigan counties to attainment status based on updated ozone data for the area. None of Consumers’ fossil-fuel-fired generating units are located in the affected western or southeastern Michigan areas. Consumers will continue to monitor developments related to the court decision and any resulting regulatory actions but does not expect them to have any impact on its generating assets.

In September 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. 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. These rules do not address existing combustion turbine electric generating units. In June 2025, the EPA issued a proposed rule containing two different pathways to rescind these requirements. Consumers does not expect these proposed changes will have a significant impact on its existing gas- and oil-fueled steam electric generating assets. Consumers will continue to follow the EPA rules that address greenhouse gas emissions and will continue to evaluate potential impacts to its operations.operations, both present and future.

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, including the potential submission of comments, which are due in June 2026.rule. Any changes to compliance strategy will depend on the content of the issuedany final rule.rule issued.

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.