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File No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-3A-2
STATEMENT BY HOLDING COMPANY CLAIMING EXEMPTION UNDER
RULE U-3A-2 FROM THE PROVISIONS OF THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935
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TO BE FILED ANNUALLY PRIOR TO MARCH 1
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CONSUMERS ENERGY COMPANY
(Name of Company)
hereby files with the Securities and Exchange Commission, pursuant to Rule 2,
its statement claiming exemption as a holding company from the provisions of the
Public Utility Holding Company Act of 1935, and submits the following
information:
April 27, 2001
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1. NAME, STATE OF ORGANIZATION, LOCATION AND NATURE OF BUSINESS OF
CLAIMANT AND EVERY SUBSIDIARY THEREOF, OTHER THAN ANY EXEMPT WHOLESALE
GENERATOR (EWG) OR FOREIGN UTILITY COMPANY IN WHICH CLAIMANT DIRECTLY
OR INDIRECTLY HOLDS AN INTEREST.
All ownership interests are 100% unless indicated parenthetically to
the contrary.
CONSUMERS ENERGY COMPANY
ADDRESS: 212 West Michigan Avenue, Jackson, Michigan 49201
Consumers Energy Company ("Consumers") is a Michigan corporation engaged in the
generation, purchase, transmission, distribution and sale of electricity, and in
the purchase, storage, transmission, distribution and sale of natural gas, in
the lower peninsula of the State of Michigan. On April 1, 2001, Consumers became
a "public utility holding company", as defined in the Public Utility Holding
Company Act of 1935 ("1935 Act"), upon transfer of control of certain of its
transmission facilities to Michigan Electric Transmission Company ("Michigan
Electric"), a wholly owned subsidiary of Consumers.
The name, state of organization and nature of business of Consumer's
subsidiaries are described below:
1. CMS ENGINEERING CO.
ADDRESS: 212 West Michigan Avenue, Jackson, Michigan 49201
CMS Engineering Company is a Michigan corporation engaged in
offering design, engineering, project management and related
construction services to natural gas utilities, natural gas
exploration and production companies, and other energy
businesses.
2. CMS MIDLAND HOLDINGS COMPANY
ADDRESS: 212 West Michigan Avenue, Jackson, Michigan 49201
CMS Midland Holdings Company is a Michigan corporation involved
as a Limited Partner in the First Midland Limited Partnership, a
Delaware limited partnership, a partnership that leases assets
to the Midland Cogeneration Venture Limited Partnership, a
Michigan limited partnership.
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3. CMS MIDLAND, INC.
ADDRESS: 212 West Michigan Avenue, Jackson, Michigan 49201
CMS Midland, Inc. is as Michigan corporation engaged as a 49%
General Partner in the Midland Cogeneration Venture Limited
Partnership, a Michigan limited partnership.
4. CONSUMERS ENERGYGUARD SERVICES, INC.
ADDRESS: 212 West Michigan Avenue, Jackson, Michigan 49201
Consumers EnergyGuard Services, Inc. is a Michigan corporation
formed for the purpose of marketing EnergyGuard, a residential
bill payment insurance product to Consumers' residential
customers.
5. CONSUMERS FUNDING LLC
ADDRESS: 212 West Michigan Avenue, Jackson, Michigan 49201
Consumers Funding LLC is a Delaware limited liability company
formed for the purpose of acting as assignee of property
transferred by Consumers and issuer of securitization bonds.
6. ES SERVICES COMPANY
ADDRESS: 212 West Michigan Avenue, Jackson, Michigan 49201
ES Services Company is a Michigan corporation formed for the
purpose of offering design, engineering, project management and
related services primarily to electric utilities and generation
facilities.
7. MEC DEVELOPMENT CORP.
ADDRESS: 212 West Michigan Avenue, Jackson, Michigan 49201
MEC Development Corp. is a Michigan corporation which previously
held assets transferred to and holder of certain bonds issued by
the Midland Cogeneration Venture Limited Partnership, a Michigan
limited partnership.
8. MICHIGAN ELECTRIC TRANSMISSION COMPANY
ADDRESS: 212 West Michigan Avenue, Jackson, Michigan 49201
On April 1, 2001, Michigan Electric received from Consumers the
following assets: transmission lines (including towers, poles,
and conductors); transformers with voltage ratings of 120 kV and
above; generation tie lines
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from the transmission grid to the point of connection to
generator step-up transformers; associated voltage control
devices and power flow control devices; associated transmission
substations; and equipment spares from transmission facilities,
in exchange for all of the outstanding common stock of Michigan
Electric. Upon the transfer, Michigan Electric became a "public
utility company as defined in the 1935 Act.
9. MICHIGAN GAS STORAGE COMPANY
ADDRESS: 212 West Michigan Avenue, Jackson, Michigan 49201
Michigan Gas Storage Company is a Michigan corporation and a
natural gas company within the meaning of the Natural Gas Act
engaged in the interstate transportation and storage of gas for
a number of customers including Consumers.
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2. A BRIEF DESCRIPTION OF THE PROPERTIES OF CLAIMANT AND EACH OF ITS
SUBSIDIARY PUBLIC UTILITY COMPANIES USED FOR THE GENERATION, TRANSMISSION
AND DISTRIBUTION OF ELECTRIC ENERGY FOR SALE, OR FOR THE PRODUCTION,
TRANSMISSION AND DISTRIBUTION OF NATURAL OR MANUFACTURED GAS, INDICATING
THE LOCATION OF PRINCIPAL GENERATING PLANTS, TRANSMISSION LINES,
PRODUCING FIELDS, GAS MANUFACTURING PLANTS, AND ELECTRIC AND GAS
DISTRIBUTION FACILITIES, INCLUDING ALL SUCH PROPERTIES WHICH ARE OUTSIDE
THE STATE IN WHICH CLAIMANT AND ITS SUBSIDIARIES ARE ORGANIZED AND ALL
TRANSMISSION OR PIPELINES WHICH DELIVER OR RECEIVE ELECTRIC ENERGY OR GAS
AT THE BORDERS OF SUCH STATE.
Consumers is a public utility. Its property and facilities used for the
above-described purposes are located within the State of Michigan and are
described below.
(1) ELECTRIC PROPERTIES
Consumers' electric generation is supplied by the following plants:
2000 NET
2000 SUMMER GENERATION
NET (THOUSANDS
DEMONSTRATED OF
CAPACITY KILOWATT
AREA NAME LOCATION (KILOWATTS) HOURS)
COAL
GENERATION
JH Campbell 1&2 West Olive 609,000 3,639,548
JH Campbell 3 West Olive 765,100(1) 4,322,824
D.E Karn Essexville 515,000 3,580,567
B C Cobb Muskegon 320,000 2,182,702
JR Whiting Erie 324,000 2,004,412
JC Weadock Essexville 310,000 2,196,344
TOTAL 2,843,100 17,926,397
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(1) Represents Consumers' share of the capacity of the Campbell Plant Unit
3 net of 6.69% (ownership interests of the Michigan Public Power Agency
and Wolverine Power Supply Cooperative, Inc.).
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2000 NET
2000 SUMMER GENERATION
NET (THOUSANDS
DEMONSTRATED OF
CAPACITY KILOWATT-
AREA NAME LOCATION (KILOWATTS) HOURS
OIL/GAS B C Cobb Muskegon 183,000 52,900
GENERATION D E Karn Essexville 1,276,000 939,212
TOTAL 1,459,000 992,112
LUDINGTON
PUMPED STORAGE 954,700(2) (540,446)(3)
TOTAL 954,700 (540,446)
NUCLEAR
GENERATION Palisades South Haven 760,000 5,723,784
TOTAL 760,000 5,723,784
GAS/OIL
COMBUSTION
TURBINE Generation 346,800(4) 52,294
Hydro
Generation 73,500 351,263
TOTAL 420,300 403,557
TOTAL OWNED BY
GENERATION 6,437,100 24,505,404
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(2) Represents Consumers' share of the capacity of the Ludington Pumped
Storage Plant. Consumers and The Detroit Edison Company ("Detroit
Edison") have 51% and 49% undivided ownership, respectively, in the
plant, and the capacity of the plant is shared accordingly.
(3) Represents Consumers' share of net pumped storage generation. This
facility electrically pumps water during off peak-hours for storage to
later generated electricity during peak demand hours.
(4) Includes 1.8 MW of Distribution Generation. Generation Purchased and
Interchange Power Capacity is 1,644,200, includes 1,240 MW of purchased
contract capacity from the MCV Facility.
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On April 1, 2001, Michigan Electric acquired from Consumers transmission
facilities currently operating at voltages of 120 kV and above. The transmission
assets transferred generally consisted of the following: (i) transmission lines
(including towers, poles, and conductors); (ii) transformers with voltage
ratings of 120 kV and above; (iii) generation tie lines from the transmission
grid to the point of connection to generator step-up transformers; (iv)
associated voltage control devices and power flow control devices; (v)
associated transmission substations; and (vi) equipment spares from transmission
facilities. The transmission assets transferred to Michigan Electric did not
include radial lines with voltage ratings of 138 kV, which are used to directly
provide service to retail end-use customers. Additionally, less than 1 mile of
138 kV line that is part of a hydroelectric project was not transferred to
Michigan Electric. Other facilities owned and operated by Consumers that are
classified as distribution and used to provide transmission service to a limited
number of customers at delivery points below 120 kV were not transferred.
Consumers and Michigan Electric's electric transmission, subtransmission and
distribution lines are located on or under public highways, streets, alleys or
lands, except where they are located on or under easements or other rights.
After the transfer discussed in the previous paragraph, in the aggregate, the
transmission systems of Consumers and Michigan Electric consist of 4,467
structural miles of overhead lines. Their subtransmission systems consist of a
total of 4,176 structural miles of overhead lines and 16 subsurface miles of
underground lines. Consumers' distribution system consists of 53,912 structural
miles of overhead lines and 7,386 subsurface miles of underground lines.
Consumers and Michigan Electric own substations having an aggregate transformer
capacity of 40,254,830 kilovolt amperes.
At December 31, 2000, Consumers was interconnected with certain Michigan and
neighboring utilities. Consumers and Detroit Edison had previously formed and
jointly operated as the Michigan Electric Coordinated Systems ("MECS") to
facilitate the coordinated planning and operation of their electric systems.
MECS took advantage of the individual company's various transmission
interconnections with electric systems in Indiana, Ohio and Ontario, Canada.(1)
Effective April 1, 2001 MECS ceased operations as formerly constituted. Over
the near future, Michigan Electric and Detroit Edison will cooperate in
operations of their respective transmission systems, but even this cooperation
will of necessity change as Michigan Electric joins a regional transmission
organization or sells its transmission facilities to an independent buyer. One
or the other course of action is required by the electric industry restructuring
law passed by the Michigan Legislature in 2000. Consumers and Detroit Edison
will no longer cooperate in the operations of their generating plants and
purchases of power.
Consumers and Michigan Electric own or connect with electric transmission lines
that deliver electric energy at or near the Michigan state border to:
(i) Indiana & Michigan Electric Company at the following interconnection
points: Palisades-Cook No. 1, Palisades-Cook No. 2, Argenta-Robinson
Park and Argenta-Twin Branch; and
(ii) Northern Indiana Public Service Company at the following
interconnection point: Barton Lake-Batavia.
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(1) MECS interconnects with electric systems in Ohio and Ontario, Canada
through Detroit Edison. Detroit Edison interconnects with The Toledo
Edison Company at Majestic-Lemoyne, Monroe-Bayshore and Allen
Junction-Majestic-Monroe. Detroit Edison also interconnects with
Ontario Hydro at Waterman-Keith, Bunce Creek-Scott and two points at
St. Clair-Lambton.
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(2)GAS PROPERTIES
As of December 31, 2000, Consumers' gas properties, all located in Michigan,
included a gas distribution and transmission system, six compressor stations
located at Consumers' storage fields and along the gas transportation lines and
11 storage fields.
Consumers' gas distribution and transmission systems consist of 24,383 miles of
distribution mains and 1,108 miles of transmission lines, throughout the lower
peninsula of Michigan. Consumers owns and operates six compressor stations with
a total of 115,400 installed horsepower.
Michigan Gas Storage Company ("MGSC") owns and operates 2 gas transportation
systems, 2 compressor stations, and 3 storage fields, all located in Michigan.
Michigan Gas Storage transmission mains consist of 521 miles of transmission
mains. Consumers receives natural gas for its local distribution system through
interconnection facilities located in Michigan and at the Michigan State border.
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3. THE FOLLOWING INFORMATION FOR THE LAST CALENDAR YEAR WITH RESPECT TO
CLAIMANT AND EACH OF ITS SUBSIDIARY PUBLIC UTILITY COMPANIES:
ELECTRIC ENERGY
(A) NUMBER OF KWH OF ELECTRIC ENERGY SOLD (AT RETAIL OR WHOLESALE).
SUBSIDIARY STATE KWH
CONSUMERS Michigan 38,497,400,287
Ontario, Canada* 865,766,000
Indiana 908,669,500
Ohio* 35,579,000
TOTAL ELECTRIC ENERGY SOLD 40,307,414,787
* Represents the amounts ultimately delivered to the State line by
Detroit Edison.
(B) NUMBER OF KWH OF ELECTRIC ENERGY DISTRIBUTED AT RETAIL OUTSIDE OF THE
STATE OF MICHIGAN.
NONE
(C) NUMBER OF KWH OF ELECTRIC ENERGY SOLD AT WHOLESALE OUTSIDE THE STATE OR
AT THE STATE LINE OF MICHIGAN.
SUBSIDIARY STATE KWH
CONSUMERS Ontario, Canada* 865,766,000
Indiana 908,669,500
Ohio* 35,579,000
TOTAL ELECTRIC ENERGY SOLD AT
WHOLESALE OUTSIDE THE STATE OF
MICHIGAN OR AT MICHIGAN'S
STATE LINE. 1,810,014,500
* Represents the amounts ultimately delivered to the state line by
Detroit Edison.
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(D) NUMBER OF KWH OF ELECTRIC ENERGY PURCHASED OUTSIDE OF THE STATE OF
MICHIGAN OR AT MICHIGAN'S STATE LINE.
SUBSIDIARY STATE KWH
CONSUMERS Ontario, Canada* 217,570,000
Indiana 5,002,298,000
Ohio* 329,686,000
TOTAL ELECTRIC ENERGY
PURCHASED OUTSIDE OF
MICHIGAN 5,549,554,000
* Represents amounts ultimately delivered to the state line by Detroit
Edison.
NATURAL GAS(1)
(A) NUMBER OF MCF. OF NATURAL GAS DISTRIBUTED AT RETAIL.
SUBSIDIARY STATE KWH
CONSUMERS Michigan 249,047,658
TOTAL NATURAL GAS
DISTRIBUTED AT RETAIL 249,047,658
(B) NUMBER OF MCF. OF NATURAL GAS DISTRIBUTED AT RETAIL OUTSIDE THE STATE
OF MICHIGAN.
NONE
(C) NUMBER OF MCF. OF NATURAL GAS SOLD AT WHOLESALE OUTSIDE MICHIGAN OR AT
MICHIGAN'S LINE.
NONE
(D) NUMBER OF MCF. OF NATURAL GAS PURCHASED OUTSIDE THE STATE OF MICHIGAN.
SUBSIDIARY STATE MCF.
---------- ----- ----
CONSUMERS* 215,918,000
TOTAL NATURAL GAS PURCHASED
OUTSIDE OF MICHIGAN 215,918,000
* Purchased gas data is not available by state or county for Consumers.
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4. THE FOLLOWING INFORMATION FOR THE REPORTING PERIOD WITH RESPECT TO
CLAIMANT AND EACH INTEREST IT HOLDS DIRECTLY OR INDIRECTLY IN AN EWG OR
A FOREIGN UTILITY COMPANY, STATING MONETARY AMOUNTS IN UNITED STATES
DOLLARS:
(A) NAME, LOCATION, BUSINESS ADDRESS AND DESCRIPTION OF THE FACILITIES USED
BY THE EWG OR FOREIGN UTILITY COMPANY FOR THE GENERATION, TRANSMISSION
AND DISTRIBUTION OF ELECTRIC ENERGY FOR SALE OR FOR THE DISTRIBUTION AT
RETAIL OF NATURAL OR MANUFACTURED GAS.
NONE
(B) NAME OF EACH SYSTEM COMPANY THAT HOLDS AN INTEREST IN SUCH EWG OR
FOREIGN UTILITY COMPANY; AND DESCRIPTION OF THE INTEREST HELD.
NONE
(C) TYPE AND AMOUNT OF THE CAPITAL INVESTED, DIRECTLY OR INDIRECTLY, BY THE
HOLDING COMPANY CLAIMING EXEMPTION; ANY DIRECT OR INDIRECT GUARANTEE OF
THE SECURITY OF THE EWG OR FOREIGN UTILITY COMPANY BY THE HOLDING
COMPANY CLAIMING EXEMPTION; AND ANY DEBT OR OTHER FINANCIAL OBLIGATION
FOR WHICH THERE IS RECOURSE, DIRECTLY OR INDIRECTLY, TO THE HOLDING
COMPANY CLAIMING EXEMPTION OR ANOTHER SYSTEM COMPANY, OTHER THAN THE
EWG OR FOREIGN UTILITY COMPANY.
NONE
(D) CAPITALIZATION AND EARNINGS OF THE EWG OR FOREIGN UTILITY COMPANY
DURING THE REPORTING PERIOD.
NONE
(E) IDENTIFY ANY SERVICE, SALES OR CONSTRUCTION CONTRACT(S) BETWEEN THE EWG
OR FOREIGN UTILITY COMPANY AND A SYSTEM COMPANY, AND DESCRIBE THE
SERVICES TO BE RENDERED OR GOODS SOLD AND FEES OR REVENUES UNDER SUCH
AGREEMENT(S).
NONE
EXHIBIT A - 1 Consolidating statement of income and surplus of Claimant and
its subsidiary companies for the calendar year 2000, together
with a consolidating balance sheet of Claimant and its subsidiary
companies as of the close of such calendar year.
EXHIBIT A - 2 Proforma Consolidating statement of income and surplus of
Claimant and its subsidiary companies for the calendar year 2000,
together with a proforma consolidating balance sheet of Claimant
and its subsidiary companies as of the close of such calendar
year, to reflect the transfer of transmission assets from
Claimant to Michigan Electric as if such transfer occurred on or
before December 31, 2000.
EXHIBIT B - Not Applicable
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The above-named Claimant has caused this statement to be duly executed
on its behalf by its authorized officer on this 27th day of April, 2001.
CONSUMERS ENERGY COMPANY
A Michigan corporation
[CORPORATE SEAL] By: /s/ David A. Mikelonis
David A. Mikelonis
Senior Vice President and
General Counsel
ATTEST:
/s/ Joyce Norkey
Joyce Norkey
Assistant Secretary
Name, title, and address of officer to whom notices and correspondence
concerning this Statement should be addressed:
David A. Mikelonis
Senior Vice President and
General Counsel
Consumers Energy Company
212 West Michigan Avenue
Jackson, Michigan 49201
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EXHIBIT A-1
A consolidating statement of income and surplus of Consumers and its
subsidiary companies for the last calendar year, together with a consolidating
balance sheet of Consumers and its subsidiary companies as of the close of such
calendar year is attached.
CONSUMERS ENERGY COMPANY
Consolidating Statement of Income
For the Year Ended December 31, 2000
(In Millions)
Michigan CMS Consumers
Consumers Gas CMS Midland CMS Energy
Energy Storage Engineering Holdings Midland Intercompany Company
Company (1) Company Co. Company Inc. Eliminations Consol.
Operating Revenue
Electric $ 2,676 $ - $- $ - $ - $ - $ 2,676
Gas 1,191 24 - -- -- (19) 1,196
Other 5 -- 2 13 44 (1) 63
------- --- -- --- --- ---- -------
Total operating revenue 3,872 24 2 13 44 (20) 3,935
------- --- -- --- --- ---- -------
Operating Expenses
Fuel for electric generation 324 -- - -- -- -- 324
Purchased power -
related parties 534 -- - -- -- -- 534
Purchased and interchange
power 402 -- - -- -- -- 402
Cost of gas sold 738 -- - -- -- (19) 719
Other operation expense 517 8 2 -- -- (1) 526
Maintenance 170 2 - -- -- -- 172
Depreciation, depletion
and amortization 423 2 - -- 1 -- 426
General taxes 195 2 - -- -- -- 197
------- --- -- --- --- ---- -------
Total operating expenses 3,303 14 2 -- 1 (20) 3,300
------- --- -- --- --- ---- -------
Pretax Operating Income 569 10 - 13 43 -- 635
------- --- -- --- --- ---- -------
Other Income (Deductions)
Dividends and interest
from affiliates 48 -- - -- -- (38) 10
Accretion income 2 -- - -- -- -- 2
Accretion expense (7) -- - -- -- -- (7)
Other, net 39 -- - -- -- (44) (5)
------- --- -- --- --- ---- -------
Total other income
(deductions) 82 -- - -- -- (82) --
------- --- -- --- --- ---- -------
Interest Charges
Interest on long-term debt 141 -- - -- -- -- 141
Other interest 80 1 - -- -- (37) 44
Capitalized interest (2) -- - -- -- -- (2)
------- --- -- --- --- ---- -------
Net interest charges 219 1 - -- -- (37) 183
------- --- -- --- --- ---- -------
Income (Loss) Before Income Taxes 432 9 - 13 43 (45) 452
Income Taxes 127 3 - 3 15 -- 148
------- --- -- --- --- ---- -------
Net Income (Loss) 305 6 - 10 28 (45) 304
Preferred Stock Dividends 2 -- - -- -- -- 2
Preferred Securities Distribution 34 -- - -- -- -- 34
------- --- -- --- --- ---- -------
Net Income (Loss) Available
to Common Stockholder 269 6 - 10 28 (45) 268
Dividends on Common Stock 248 -- - -- -- (1) 247
------- --- -- --- --- ---- -------
Net Income (Loss) After Common
Dividends $ 21 $ 6 $- $10 $28 $(44) $ 21
======= === == === === ==== =======
(1) Represents Consumers consolidated with ES Services Company and Consumers
EnergyGuard Services, Inc.; Michigan Gas Storage Company, CMS Midland
Holdings Company, CMS Midland, Inc. and CMS Engineering Co. are included
on the equity method of accounting.
A-1
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CONSUMERS ENERGY COMPANY
Consolidating Balance Sheet - Assets
December 31, 2000
(In Millions)
Michigan CMS Consumers
Consumers Gas ES Midland CMS Energy
Energy Storage Services Holdings Midland Intercompany Company
Company (1) Company Company Company Inc. Eliminations Consol.
Plant and Property (At Cost)
Electric $ 7,241 $-- $-- $-- $-- $ -- $7,241
Gas 2,385 118 -- -- -- -- 2,503
Other 23 -- -- -- -- -- 23
------- ---- ---- ---- ----- ------- ------
9,649 118 -- -- -- -- 9,767
Less accumulated depreciation,
depletion and amortization 5,711 57 -- -- -- -- 5,768
------- ---- ---- ---- ----- ------- ------
3,938 61 -- -- -- -- 3,999
Construction work-in-progress 277 2 -- -- -- -- 279
------- ---- ---- ---- ----- ------- ------
4,215 63 -- -- -- -- 4,278
------- ---- ---- ---- ----- ------- ------
Investments
Associated companies 516 -- -- -- -- (430) 86
First Midland Limited
Partnership -- -- -- 245 -- -- 245
Midland Cogeneration
Venture -- -- -- -- 290 -- 290
Other -- -- -- -- -- -- --
------- ---- ---- ---- ----- ------- ------
516 -- -- 245 290 (430) 621
------- ---- ---- ---- ----- ------- ------
Current Assets
Cash and temporary cash
investments 20 -- 1 -- -- -- 21
Accounts/notes receivable 75 3 -- -- 10 (18) 70
Accrued revenues 266 -- -- -- -- -- 266
Inventories to average cost
Gas in underground storage 271 -- -- -- -- -- 271
Materials and supplies 66 -- -- -- -- -- 66
Generating plant fuel
stock 46 -- -- -- -- -- 46
Deferred income taxes (16) -- -- 18 -- -- 2
Prepayments and other 168 -- -- -- -- -- 168
------- ---- ---- ---- ----- ------- ------
896 3 1 18 10 (18) 910
------- ---- ---- ---- ----- ------- ------
Non-current Assets
Securitization costs 709 -- -- -- -- -- 709
Nuclear decommissioning
trust funds 611 -- -- -- -- -- 611
Postretirement benefits 228 4 -- -- -- -- 232
Abandoned Midland project 22 -- -- -- -- -- 22
Other 796 1 -- -- -- (407) 390
------- ---- ---- ---- ----- ------- ------
2,366 5 -- -- -- (407) 1,964
------- ---- ---- ---- ----- ------- ------
Total Assets $ 7,993 $ 71 $ 1 $263 $ 300 $ (855) $7,773
======= ==== ==== ==== ===== ======= ======
(1) Represents Consumers consolidated with ES Services Company and Consumers
EnergyGuard Services, Inc.; Michigan Gas Storage Company, CMS Midland
Holdings Company, CMS Midland, Inc. and CMS Engineering Co. are included
on the equity method of accounting.
A-2
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CONSUMERS ENERGY COMPANY
Consolidating Balance Sheet - Equity and Liabilities
December 31, 2000
(In Millions)
Michigan CMS Consumers
Consumers Gas ES Midland CMS Energy
Energy Storage Services Holdings Midland Intercompany Company
Company (1) Company Company Company Inc. Eliminations Consol.
Capitalization
Common Stockholders' Equity
Common stock $ 841 $15 $ -- $ -- $ -- $ (15) $ 841
Other paid-in-capital 658 -- 1 43 167 (223) 646
Revaluation capital 33 -- -- -- -- -- 33
Retained earnings 506 36 -- 32 124 (192) 506
------ --- ---- ----- ----- ------- ------
2,038 51 1 75 291 (430) 2,026
Preferred stock 44 -- -- -- -- -- 44
Company-obligated mandatorily
redeemable preferred
securities of:
Consumers Power Company
Financing I 100 -- -- -- -- -- 100
Consumers Energy Company
Financing II 120 -- -- -- -- -- 120
Consumers Energy Company
Financing III 175 -- -- -- -- -- 175
Long-term debt 2,517 -- -- -- -- (407) 2,110
Non-current capital leases 49 -- -- -- -- -- 49
------ --- ---- ----- ----- ------- ------
5,043 51 1 75 291 (837) 4,624
------ --- ---- ----- ----- ------- ------
Current Liabilities
Current portion of long-term
debt 175 -- -- -- -- -- 175
Current capital leases 56 -- -- -- -- -- 56
Notes payable 413 5 -- -- -- (15) 403
Accounts payable 250 4 -- -- -- -- 254
Accounts payable - related
parties 69 1 -- -- -- (3) 67
Accrued interest 41 -- -- -- -- -- 41
Accrued taxes 236 -- -- 12 (1) -- 247
Other 212 -- -- -- -- -- 212
------ --- ---- ----- ----- ------- ------
1,452 10 -- 12 (1) (18) 1,455
------ --- ---- ----- ----- ------- ------
Non-current Liabilities
Deferred income taxes 542 6 -- 159 9 -- 716
Postretirement benefits 362 4 -- -- -- -- 366
Deferred investment tax credit 91 -- -- 17 1 -- 109
Regulatory liabilities for
income taxes, net 246 -- -- -- -- -- 246
Other 257 -- -- -- -- -- 257
------ --- ---- ----- ----- ------- ------
1,498 10 -- 176 10 -- 1,694
------ --- ---- ----- ----- ------- ------
Total Stockholders' Equity
and Liabilities $7,993 $71 $ 1 $ 263 $ 300 $ (855) $7,773
====== === ==== ===== ===== ======= ======
A-3
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CONSUMERS ENERGY COMPANY
Consolidating Statement of Retained Earnings
December 31, 2000
(In Millions)
Michigan CMS Consumers
Consumers Gas Midland CMS Inter- Power
Energy Storage Holdings Midland company Company
Company (1) Company Company Inc. Eliminations Consol.
Balance at January 1, 2000 $485 $30 $22 $ 96 $(148) $485
Net Income (Loss) 305 6 10 28 (45) 304
Less Dividends Paid
Common Stock -- -- -- -- -- --
Preferred Stock 2 -- -- -- -- 2
Preferred Securities Dist. 34 -- -- -- -- 34
Associated Companies 248 -- -- -- (1) 247
---- --- --- ----- ----- ----
284 -- -- -- (1) 283
---- --- --- ----- ----- ----
Balance at December 31, 2000 $506 $36 $32 $ 124 $(192) $506
==== === === ===== ===== ====
(1) Represents Consumers consolidated with ES Services Company and Consumers
EnergyGuard Services, Inc.; Michigan Gas Storage Company, CMS Midland
Holdings Company, CMS Midland, Inc. and CMS Engineering Co. are included
on the equity method of accounting.
A-4
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EXHIBIT A-2
An unaudited pro forma consolidating statement of income and surplus of
Consumers Energy, its subsidiary companies and Michigan Electric Transmission
Company for the last calendar year, together with an unaudited pro forma
consolidating balance sheet of Consumers Energy, its subsidiary companies and
Michigan Electric Transmission Company as of the close of such calendar year is
attached.
CONSUMERS ENERGY COMPANY
Pro Forma Consolidating Statement of Income
For the Year Ended December 31, 2000
(In Millions)
Michigan Michigan CMS Consumers
Consumers Electric Gas CMS Midland CMS Inter Energy
Energy Transmission Storage Engineering Holdings Midland company Company
Company (1) Company (2) Company Co. Company Inc. Eliminations(3) Consol.
Operating Revenue
Electric $2,673 $ 64 $ - $ - $ - $ - $(61)A $2,676
Gas 1,191 - 24 - - - (19) 1,196
Other 5 - - 2 13 44 (1) 63
------ ------ ------ ------ ------ ------ ------ ------
Total operating revenue 3,869 64 24 2 13 44 (81) 3,935
------ ------ ------ ------ ------ ------ ------ ------
Operating Expenses
Fuel for electric generation 324 - - - - - - 324
Purchased power -
related parties 595 - - - - - (61)A 534
Purchased and interchange
power 402 - - - - - - 402
Cost of gas sold 738 - - - - - (19) 719
Other operation expense 497 20 8 2 - - (1) 526
Maintenance 168 2 2 - - - - 172
Depreciation, depletion
and amortization 411 12 2 - - 1 - 426
General taxes 188 7 2 - - - - 197
------ ------ ------ ------ ------ ------ ------ ------
Total operating expenses 3,323 41 14 2 - 1 (81) 3,300
------ ------ ------ ------ ------ ------ ------ ------
Pretax Operating Income 546 23 10 - 13 43 - 635
------ ------ ------ ------ ------ ------ ------ ------
Other Income (Deductions)
Dividends and interest
from affiliates 48 - - - - - (38) 10
Accretion income 2 - - - - - - 2
Accretion expense (7) - - - - - - (7)
Other, net 54 - - - - - (59)B (5)
------ ------ ------ ------ ------ ------ ------ ------
Total other income
(deductions) 97 - - - - - (97) -
------ ------ ------ ------ ------ ------ ------ ------
Interest Charges
Interest on long-term debt 141 - - - - - - 141
Other interest 80 - 1 - - - (37) 44
Capitalized interest (2) - - - - - - (2)
------ ------ ------ ------ ------ ------ ------ ------
Net interest charges 219 - 1 - - - (37) 183
------ ------ ------ ------ ------ ------ ------ ------
Income(Loss)Before Income Taxes 424 23 9 - 13 43 (60) 452
Income Taxes 119 8 3 - 3 15 - 148
------ ------ ------ ------ ------ ------ ------ ------
Net Income (Loss) 305 15 6 - 10 28 (60) 304
Preferred Stock Dividends 2 - - - - - - 2
Preferred Securities Distribution 34 - - - - - - 34
------ ------ ------ ------ ------ ------ ------ ------
Net Income (Loss) Available
to Common Stockholder 269 15 6 - 10 28 (60) 268
Dividends on Common Stock 248 - - - - - (1) 247
------ ------ ------ ------ ------ ------ ------ ------
Net Income (Loss) After Common
Dividends $ 21 $ 15 $ 6 $ - $ 10 $ 28 $ (59) $ 21
====== ====== ====== ====== ====== ====== ====== ======
(1) Represents Consumers consolidated with ES Services Company and Consumers
EnergyGuard Services, Inc. Michigan Electric, Michigan Gas Storage Company,
CMS Midland Holdings Company, CMS Midland, Inc. and CMS Engineering Co. are
included on the equity method of accounting.
(2) Michigan Electric's statement of income reflects the best estimate
available.
(3) Intercompany Eliminations changes from exhibit A-1 related to the Michigan
Electric's pro forma are as follows:
A Electric Operating Revenue recorded by Michigan Electric of $61 million
was eliminated against $61 million of Purchased power - related parties
recorded by Consumers.
B Equity earnings, recorded by Consumers related to Michigan Electric of $15
million, was eliminated.
A-5
18
CONSUMERS ENERGY COMPANY
Pro Forma Consolidating Balance Sheet - Assets
December 31, 2000
(In Millions)
Michigan Michigan CMS Consumers
Consumers Electric Gas ES Midland CMS Inter Energy
Energy Transmission Storage Services Holdings Midland company Company
Company (1) Company (2) Company Company Company Inc. Eliminations(3) Consol.
Plant and Property (At Cost)
Electric $ 6,770 $471 $-- $-- $-- $-- $ -- $7,241
Gas 2,385 -- 118 -- -- -- -- 2,503
Other 23 -- -- -- -- -- -- 23
------- ---- ---- ---- ---- ---- ------- ------
9,178 471 118 -- -- -- -- 9,767
Less accumulated depreciation,
depletion and amortization 5,500 211 57 -- -- -- -- 5,768
------- ---- ---- ---- ---- ---- ------- ------
3,678 260 61 -- -- -- -- 3,999
Construction work-in-progress 277 -- 2 -- -- -- -- 279
------- ---- ---- ---- ---- ---- ------- ------
3,955 260 63 -- -- -- -- 4,278
------- ---- ---- ---- ---- ---- ------- ------
Investments
Associated companies 746 -- -- -- -- -- (660)C 86
First Midland Limited
Partnership -- -- -- -- 245 -- -- 245
Midland Cogeneration
Venture -- -- -- -- -- 290 -- 290
Other -- -- -- -- -- -- -- --
------- ---- ---- ---- ---- ---- ------- ------
746 -- -- -- 245 290 (660) 621
------- ---- ---- ---- ---- ---- ------- ------
Current Assets
Cash and temporary cash
investments 20 -- -- 1 -- -- -- 21
Accounts/notes receivable 52 23 3 -- -- 10 (18) 70
Accrued revenues 266 -- -- -- -- -- -- 266
Inventories to average cost-
Gas in underground storage 271 -- -- -- -- -- -- 271
Materials and supplies 66 -- -- -- -- -- -- 66
Generating plant fuel
stock 46 -- -- -- -- -- -- 46
Deferred income taxes (16) -- -- -- 18 -- -- 2
Prepayments and other 168 -- -- -- -- -- -- 168
------- ---- ---- ---- ---- ---- ------- ------
873 23 3 1 18 10 (18) 910
------- ---- ---- ---- ---- ---- ------- ------
Non-current Assets
Securitization costs 709 -- -- -- -- -- -- 709
Nuclear decommissioning
trust funds 611 -- -- -- -- -- -- 611
Postretirement benefits 228 -- 4 -- -- -- -- 232
Abandoned Midland project 22 -- -- -- -- -- -- 22
Other 796 -- 1 -- -- -- (407) 390
------- ---- ---- ---- ---- ---- ------- ------
2,366 -- 5 -- -- -- (407) 1,964
------- ---- ---- ---- ---- ---- ------- ------
Total Assets $ 7,940 $283 $ 71 $ 1 $263 $300 $(1,085) $7,773
======= ==== ==== ==== ==== ==== ======= ======
(1) Represents Consumers consolidated with ES Services Company and Consumers
EnergyGuard Services, Inc. Michigan Electric, Michigan Gas Storage Company,
CMS Midland Holdings Company, CMS Midland, Inc. and CMS Engineering Co. are
included on the equity method of accounting.
(2) Michigan Electric's balance sheet reflects the estimated asset transfer
from Consumers.
(3) Intercompany Eliminations changes from exhibit A-1 related to the Michigan
Electric's pro forma are as follows:
C Investments - Associated companies related to Michigan Electric of
$230 million, recorded by Consumers, was eliminated against $215 million of
Other paid-in capital and $15 million of Retained earnings recorded by
Michigan Electric.
A-6
19
CONSUMERS ENERGY COMPANY
Pro Forma Consolidating Balance Sheet - Equity and Liabilities
December 31, 2000
(In Millions)
Michigan Michigan CMS Consumers
Consumers Electric Gas ES Midland CMS Inter Energy
Energy Transmission Storage Services Holdings Midland company Company
Company (1) Company (2) Company Company Company Inc. Eliminations(3) Consol.
Capitalization
Common Stockholders' Equity
Common stock $ 841 $-- $15 $-- $-- $ -- $ (15) $ 841
Other paid-in-capital 658 215 -- 1 43 167 (438)C 646
Revaluation capital 33 -- -- -- -- -- -- 33
Retained earnings 506 15 36 -- 32 124 (207)C 506
------ ---- --- ---- ----- ------- ------- ------
2,038 230 51 1 75 291 (660) 2,026
Preferred stock 44 -- -- -- -- -- -- 44
Company-obligated mandatorily
redeemable preferred
securities of:
Consumers Power Company
Financing I 100 -- -- -- -- -- -- 100
Consumers Energy Company
Financing II 120 -- -- -- -- -- -- 120
Consumers Energy Company
Financing III 175 -- -- -- -- -- -- 175
Long-term debt 2,517 -- -- -- -- -- (407) 2,110
Non-current capital leases 49 -- -- -- -- -- -- 49
------ ---- --- ---- ----- ------- ------- ------
5,043 230 51 1 75 291 (1,067) 4,624
------ ---- --- ---- ----- ------- ------- ------
Current Liabilities
Current portion of long-term
debt 175 -- -- -- -- -- -- 175
Current capital leases 56 -- -- -- -- -- -- 56
Notes payable 413 -- 5 -- -- -- (15) 403
Accounts payable 250 -- 4 -- -- -- -- 254
Accounts payable - related
parties 69 -- 1 -- -- -- (3) 67
Accrued interest 41 -- -- -- -- -- -- 41
Accrued taxes 228 8 -- -- 12 (1) -- 247
Other 212 -- -- -- -- -- -- 212
------ ---- --- ---- ----- ------- ------- ------
1,444 8 10 -- 12 (1) (18) 1,455
------ ---- --- ---- ----- ------- ------- ------
Non-current Liabilities
Deferred income taxes 497 45 6 -- 159 9 -- 716
Postretirement benefits 362 -- 4 -- -- -- -- 366
Deferred investment tax credit 91 -- -- -- 17 1 -- 109
Regulatory liabilities for
income taxes, net 246 -- -- -- -- -- -- 246
Other 257 -- -- -- -- -- -- 257
------ ---- --- ---- ----- ------- ------- ------
1,453 45 10 -- 176 10 -- 1,694
------ ---- --- ---- ----- ------- ------- ------
Total Stockholders' Equity
and Liabilities $7,940 $283 $71 $ 1 $ 263 $ 300 $(1,085) $7,773
====== ==== === ==== ===== ======= ======= ======
(1) Represents Consumers consolidated with ES Services Company and Consumers
EnergyGuard Services, Inc. Michigan Electric, Michigan Gas Storage Company,
CMS Midland Holdings Company, CMS Midland, Inc. and CMS Engineering Co. are
included on the equity method of accounting.
(2) Michigan Electric's balance sheet reflects the estimated asset transfer
from Consumers.
(3) Intercompany Eliminations changes from exhibit A-1 related to the Michigan
Electric's pro forma are as follows:
C Investments - Associated companies related to Michigan Electric of $230
million, recorded by Consumers, was eliminated against $215 million of
Other paid-in capital and $15 million of Retained earnings recorded by
Michigan Electric.
A-7
20
CONSUMERS ENERGY COMPANY
Pro Forma Consolidating Statement of Retained Earnings
December 31, 2000
(In Millions)
Michigan Michigan CMS Consumers
Consumers Electric Gas Midland CMS Inter Power
Energy Transmission Storage Holdings Midland company Company
Company (1) Company Company Company Inc. Eliminations(2) Consol.
Balance at January 1, 2000 $ 485 $ - $ 30 $ 22 $ 96 $ (148) $ 485
Net Income (Loss) 305 15 6 10 28 (60)D 304
Less Dividends Paid
Common Stock - - - - - - -
Preferred Stock 2 - - - - - 2
Preferred Securities Dist. 34 - - - - - 34
Associated Companies 248 - - - - (1) 247
------ ------ ------ ------ ------ ------ ------
284 - - - - (1) 283
------ ------ ------ ------ ------ ------ ------
Balance at December 31, 2000 $ 506 $ 15 $ 36 $ 32 $ 124 $ (207) $ 506
====== ====== ====== ====== ====== ====== ======
(1) Represents Consumers consolidated with ES Services Company and Consumers
EnergyGuard Services, Inc. Michigan Electric, Michigan Gas Storage Company,
CMS Midland Holdings Company, CMS Midland, Inc. and CMS Engineering Co. are
included on the equity method of accounting.
(2) Intercompany Eliminations changes from exhibit A-1 related to the Michigan
Electric's pro forma are as follows:
D Michigan Electric's Net Income of $15 million was eliminated.
A-8