exhibit ab-1 page 1 of 2

Exhibit AB-1 of 2

Consumers Energy

Electric Utility

Excess Deferred Taxes Detail By Segment

Tax Cuts and Jobs Act of 2017

Consumers Proposed Alternative Allocation Other Plant All Other Other Plant All Other

Ending Timing Excess Gross-Up Plant Diff Non-Protected Non-Protected Plant Diff Non-Protected Non-Protected Difference DFIT @ 14% @ 1.341056 ARAM 27 15 ARAM 27 10

(1) (2)=(1)*14% (3)=(2)*1.341056 (4) (5) (6) (7) (8) (9)ElectricMethod Life (Book/Tax Depreciation Difference) Protected/ARAM 6,153,043,322$ 861,426,065$ 1,155,220,593$ 1,155,220,593$ 1,155,220,593$263A Mixed Service Costs Unprotected 265,648,284 37,190,760 49,874,892 49,874,892$ 49,874,892$ Book Reserve Adjustment Unprotected 178,157,905 24,942,107 33,448,762 33,448,762 33,448,762

Capitalized Benefits Unprotected 82,778,059 11,588,928 15,541,402 15,541,402 15,541,402

Contributions in Aid of Construction Unprotected (150,152,526) (21,021,354) (28,190,812) (28,190,812) (28,190,812)$ Cost of Removal Unprotected (870,199,400) (121,827,916) (163,378,058) (163,378,058) (163,378,058)

ITC & Other Credits Unprotected 29,428,043 4,119,926 5,525,052 5,525,052 5,525,052

Net Capitalized Interest Unprotected (92,070,205) (12,889,829) (17,285,982) (17,285,982) (17,285,982)

Other Timing Differences Unprotected 128,001,550 17,920,217 24,032,015 24,032,015 24,032,015

Software Expense Unprotected 69,789,942 9,770,592 13,102,911 13,102,911 13,102,911

Total Plant Differences 5,794,424,974$ 811,219,496$ 1,087,890,773$

ElectricEmployee Benefits Unprotected 386,541,554$ 54,115,818$ 72,572,342$ 72,572,342$ 72,572,342

Other Unprotected (94,992,235) (13,298,913) (17,834,587) (17,834,587) (17,834,587)

Real & Personal Property Taxes Unprotected 198,168,384 27,743,574 37,205,686 37,205,686 37,205,686

Reserves Unprotected (50,553,979) (7,077,557) (9,491,400) (9,491,400) (9,491,400)

Securitized Costs Unprotected 279,596,536 39,143,515 52,493,646 52,493,646 52,493,646

State/Local Fed offset Unprotected ‐ (37,700,027) (50,557,847) (50,557,847) (47,762,287) 8,635,048 (11,430,608)

Total Other Differences 718,760,260$ 62,926,409$ 84,387,839$

Total Electric Excess Deferred Taxes By Category1 1,155,220,593$ (67,329,820)$ 84,387,839$ 1,107,458,306$ (200,219,804)$ 265,040,110$

Source: Consumer Response to HSC‐CE 31 and 32.1 Totals are used to develop annual amortizations.

Description

Exhibit AB-1 of 2

Consumers Energy

Gas Utility

Excess Deferred Taxes Detail By Segment

Tax Cuts and Jobs Act of 2017

Consumers Proposed Alternative Allocation Other Plant All Other Other Plant All Other

Ending Timing Excess Gross-Up Plant Diff Non-Protected Non-Protected Plant Diff Non-Protected Non-Protected Difference DFIT @ 14% @ 1.341056 ARAM 44 15 ARAM 44 10

(1) (2)=(1)*14% (3)=(2)*1.341056 (4) (5) (6) (7) (8) (9)GasMethod Life (Book/Tax Depreciation Difference) Protected/ARAM 2,941,141,631$ 411,759,828$ 552,192,988$ 552,192,988$ 552,192,988$ 263A Mixed Service Costs Unprotected 100,720,019 14,100,803 18,909,966 18,909,966$ 18,909,966$ Book Reserve Adjustment Unprotected 1,083,564 151,699 203,437 203,437 203,437

Capitalized Benefits Unprotected 17,843,656 2,498,112 3,350,108 3,350,108 3,350,108

Contributions in Aid of Construction Unprotected (64,205,704) (8,988,799) (12,054,482) (12,054,482) (12,054,482)$ Cost of Removal Unprotected (1,108,021,879) (155,123,063) (208,028,714) (208,028,714) (208,028,714)

ITC & Other Credits Unprotected 1,628 228 306 306 306

Net Capitalized Interest Unprotected (7,669,422) (1,073,719) (1,439,917) (1,439,917) (1,439,917)

Other Timing Differences Unprotected 32,016,837 4,482,357 6,011,092 6,011,092 6,011,092

Software Expense Unprotected 46,469,815 6,505,774 8,724,607 8,724,607 8,724,607

Total Plant Differences 1,959,380,145$ 274,313,220$ 367,869,390$

GasEmployee Benefits Unprotected 189,839,057$ 26,577,468$ 35,641,873$ 35,641,873$ 35,641,873

Gas Inventory Unprotected 145,041,349 20,305,789 27,231,200 27,231,200 27,231,200

Other Unprotected 121,846,104 17,058,455 22,876,343 22,876,343 22,876,343

Real & Personal Property Taxes Unprotected 83,745,137 11,724,319 15,722,969 15,722,969 15,722,969

Reserves Unprotected (30,800,620) (4,312,087) (5,782,750) (5,782,750) (5,782,750)

State/Local Fed offset Unprotected ‐ (12,956,013) (17,374,739) (17,374,739) (20,696,844) 8,302,948 (4,980,842)

Total Other Differences 509,671,027$ 58,397,931$ 78,314,895$

Total Gas Excess Deferred Taxes By Category1 552,192,988$ (184,323,598)$ 78,314,895$ 531,496,144$ (213,220,167)$ 127,908,308$

Source: Consumer Response to HSC‐CE 31 and 32.1 Totals are used to develop annual amortizations.

Description

Exhibit AB-2Page 1 of 2

MICHIGAN PUBLIC SERVICE COMMISSION

Consumers Energy CompanyCE Electric

Projected Tax Reform Regulatory Liability & Amortization

($000)

(a) (b) (c) (d) (e)

Plant Oth Plant All Total

Line No. Description Diff* 1 Diff1 Other1 Electric

1 Amortization Period ARAM 27 1023 Tax Reform Regulatory Asset (Liability) After Gross Up (1,107,458)$ 200,220$ (265,040)$ (1,172,279)$

45 Amortization Schedule

6 2020 (22,535)$ 6,180$ (22,087)$ (38,443)$ 7 2021 (28,939) 7,416 (26,504) (48,027)

8 2022 (30,136) 7,416 (26,504) (49,225)

9 2023 (34,076) 7,416 (26,504) (53,165)

10 2024 (35,373) 7,416 (26,504) (54,461)

11 2025 (35,552) 7,416 (26,504) (54,641)

12 2026 (35,599) 7,416 (26,504) (54,688)

13 2027 (38,255) 7,416 (26,504) (57,343)

14 2028 (40,980) 7,416 (26,504) (60,068)

15 2029 (42,589) 7,416 (26,504) (61,677)

16 2030 (43,963) 7,416 (4,417) (40,965)

17 2031 (44,411) 7,416 ‐ (36,995)

18 2032 (45,359) 7,416 ‐ (37,944)

19 2033 (47,063) 7,416 ‐ (39,648)

20 2034 (48,977) 7,416 ‐ (41,561)

21 2035 (43,010) 7,416 ‐ (35,594)

22 2036 (40,584) 7,416 ‐ (33,168)

23 2037 (27,993) 7,416 ‐ (20,578)

24 2038 (24,943) 7,416 ‐ (17,528)

25 2039 (24,142) 7,416 ‐ (16,726)

26 2040 (23,362) 7,416 ‐ (15,947)

27 2041 (23,253) 7,416 ‐ (15,837)

28 2042 (23,256) 7,416 ‐ (15,840)

29 2043 (23,308) 7,416 ‐ (15,892)

30 2044 (23,338) 7,416 ‐ (15,923)

31 2045 (23,240) 7,416 ‐ (15,824)

32 2046 (23,068) 7,416 ‐ (15,652)

33 2047 (22,982) 1,236 ‐ (21,746)

34 2048 ‐ 2056 (187,173) ‐ ‐ (187,173)

35 (1,107,458)$ 200,220$ (265,040)$ (1,172,279)$

* Subject to the normalization provisions of the Internal Revenue Code.1From Exhibit AB‐1, page 1


MICHIGAN PUBLIC SERVICE COMMISSION

Consumers Energy CompanyCE Gas

Projected Tax Reform Regulatory Liability & Amortization

($000)

(a) (b) (c) (d) (e)

Plant Oth Plant All Total

Line No. Description Diff* 1 Diff1 Other1 Gas

1 Amortization Period ARAM 44 1023 Tax Reform Regulatory Asset (Liability) After Gross Up (531,496)$ 213,220$ (127,908)$ (446,184)$

45 Amortization Schedule

6 2019 (2,742) 1,211 (3,198) (4,729)

7 2020 (9,118) 4,846 (12,791) (17,063)

8 2021 (9,365) 4,846 (12,791) (17,310)

9 2022 (9,503) 4,846 (12,791) (17,448)

10 2023 (9,175) 4,846 (12,791) (17,120)

11 2024 (9,024) 4,846 (12,791) (16,969)

12 2025 (9,645) 4,846 (12,791) (17,589)

13 2026 (9,898) 4,846 (12,791) (17,843)

14 2027 (9,419) 4,846 (12,791) (17,364)

15 2028 (9,387) 4,846 (12,791) (17,332)

16 2029 (9,952) 4,846 (9,593) (14,699)

17 2030 (10,369) 4,846 ‐ (5,524)

18 2031 (10,510) 4,846 ‐ (5,664)

19 2032 (10,962) 4,846 ‐ (6,116)

20 2033 (11,432) 4,846 ‐ (6,586)

21 2034 (11,993) 4,846 ‐ (7,147)

22 2035 (12,746) 4,846 ‐ (7,900)

23 2036 (13,532) 4,846 ‐ (8,687)

24 2037 (13,616) 4,846 ‐ (8,770)

25 2038 (13,706) 4,846 ‐ (8,860)

26 2039 (13,725) 4,846 ‐ (8,879)

27 2040 (13,708) 4,846 ‐ (8,862)

28 2041 (13,723) 4,846 ‐ (8,877)

29 2042 (13,781) 4,846 ‐ (8,935)

30 2043 (13,832) 4,846 ‐ (8,986)

31 2044 (13,817) 4,846 ‐ (8,971)

32 2045 (13,778) 4,846 ‐ (8,932)

33 2046 (13,735) 4,846 ‐ (8,890)

34 2047 (13,717) 4,846 ‐ (8,871)

35 2048 (13,701) 4,846 ‐ (8,856)

36 2049 ‐ 2063 (187,885) 71,477 ‐ (116,408)

37 (531,496)$ 213,220$ (127,908)$ (446,184)$

* Subject to the normalization provisions of the Internal Revenue Code.1From Exhibit AB‐1, page 2


($000)

S&P FFO/Debt - Electric"Significant" FR

Line Description 2017 2019 E ADIT Tax Amort Adjusted Bechmark

1 Adj. FFO $1,499,695 $1,567,357 $35,692 $1,531,6652 Total Debt $5,294,333 $6,822,858 $6,822,8583 FFO/Debt 28.3% 23.0% 22.4% 13% - 23%

S&P FFO/Debt - Total Company"Significant" FR

Line Description 2017 2019 E ADIT Tax Amort Adjusted Bechmark

4 Adj. FFO $1,529,992 $1,607,824 $48,372 $1,559,4525 Total Debt $7,429,573 $9,574,562 $9,574,5626 FFO/Debt 20.6% 16.8% 16.3% 13% - 23%

__________

Sources:Standard & Poor's: "Criteria: Corporate Methodology," November 19, 2013.Standard & Poor's: RatingsDirect: "Summary: Consumers Energy Co," December 21, 2018.* Tax Conversion factor was obtained from Consumers' Reseponse to HSC-CE-7a.________Note:

Based on the December 2018 S&P report, Consumers has an "Excellent" business profile and a "Significant" financial profile, and falls under the 'Medial Volatility' matrix, and a BBB+ bond rating.

Business RiskIntermediate Significant Aggressive

Excellent A A- BBBStrong A- BBB BBSatisfactory BBB BB+ BB-

S&P Business/Financial Risk Profile MetrixFinancial Risk Profile

2020 Adjusted*

Cash Flow Credit Metrics

Consumers Energy Company

2020 Adjusted*

E ADIT: Electric $48.027MM/1.341056: $35.692MM, and Total : ($48.027MM plus $17.063MM)/1.341056: $48,372MM


Line Description Dec. 2017 Dec. 2019

Cash Flow (Funds from Operations / Debt)1 Funds from Operations (FFO) (000) $1,424,572 $1,467,020

Rating Agency Adjustments2 Capitalized Interest (5,000) (5,000)3 Operating Lease Depreciation 14,740 14,7404 PPA Depreciation 82,070 82,0705 ARO Adjustment (2,200) (2,200)6 Pension & Other Expense 15,810 51,1947 Subtotal $105,420 $140,8048 Electric Allocation 71.3% 71.3%9 Adjustments - Electric $75,123 $100,337

10 FFO - Adjusted - Electric $1,499,695 $1,567,35711 Long Term Debt (000) $5,600,000 $7,091,00012 Current Portion of Cap. Leases 22,000 22,00013 Non-Current Portion of Cap. Leases & Fin. Obl. 91,000 91,00014 Notes Payable 170,000 325,000

Rating Agency Adjustments15 Operating Leases 68,480 68,48016 Surplus Cash (101,858) (81,874)17 PPA as Debt 992,800 992,80018 ARO as Debt 289,900 289,90019 Pension 205,468 665,32320 Accrued Interest 62,273 62,39421 Issuance Cost 29,509 48,53822 Subtotal 7,429,573 9,574,56223 Electric Allocation 71.3% 71.3%24 Total Debt - Adjusted - Electric $5,294,333 $6,822,85825 FFO / Debt 28.33% 22.97%

12 Months Ending


Cash Flow Credit MetricsStandard & Poor's


Line Description Dec. 2017 Dec. 201912 Months Ending


Cash Flow Credit MetricsStandard & Poor's

Debt Leverage (Total debt / Capital %)26 Preferred Stock (000) 37,315 37,31527 Common Stock 6,287,310 7,437,78228 Deferred Taxes 3,240,147 3,321,66029 Subtotal 9,564,771 10,796,75730 Electric Allocation 71.30% 71.30%31 Equity & Deferred Tax - Electric $6,815,882 $7,693,79832 Total Debt - Adj. - Electric (above) 5,294,333 6,822,85833 Total Capital - Adjusted - Electric $12,110,215 $14,516,65734 Debt / Total Capital 43.70% 47.00%

Debt / EBITDA35 EBITDA $1,506,177 $1,450,844

Rating Agency Adjustments36 Operating Lease Adjustment 20,000 20,00037 Securitized Interest (9,500) (9,500)38 Amortized Portion of Securitized Debt (25,000) (25,000)39 ARO Interest 23,000 23,00040 PPA Depreciation 82,070 82,07041 PPA Interest 69,450 69,45042 Pension (23,947) (94,161)43 Stock Compensation Expense 16,000 16,00044 Adjustment Subtotal 152,073 81,85945 Electric Allocation 71.30% 71.30%46 Adjustment Subtotal - Electric $108,367 $58,33347 EBITDA - Adjusted - Electric $1,614,544 $1,509,17748 Total Debt - Adjusted - Electric (from above) $5,294,333 $6,822,85849 Debt / EBITDA 3.3x 4.5x

For utilities that have credit ratings from the major credit rating agencies listed below,provide pro forma financial ratios for the year preceding the Test Year and the Test Yearincluding but not restricted to the ratios listed below. Calculate each ratio using themethodology used by each credit rating agency. Include the actual, pro forma, or actualplus pro forma financial statement or statements from which each ratio was calculated,in electronic spreadsheet format:Standard & Poor’s:a. Cash Flow (Funds from Operations / Debt %);b. Debt leverage (Total debt / Capital %); andc. Debt / EBITDA_________Source:

Consumers Electric Rate Case, Michigan Public Servcice Commission Cause No. U-20134, Attachment 108, Financial Metric Part III, 208.

Summary:

Consumers Energy Co.

Primary Credit Analyst:

Gabe Grosberg, New York (1) 212-438-6043; [email protected]

Secondary Contacts:

Rebecca Ai, New York + (212) 438-7278; [email protected]

Matthew L O'Neill, New York (1) 212-438-4295; [email protected]

Table Of Contents

Rationale

Outlook

Our Base-Case Scenario

Business Risk

Financial Risk

Liquidity

Group Influence

Ratings Score Snapshot

Issue Ratings--Recovery Analysis

Related Criteria

WWW.STANDARDANDPOORS.COM/RATINGSDIRECT DECEMBER 21, 2018 1THIS WAS PREPARED EXCLUSIVELY FOR USER CHRIS WALTERS.NOT FOR REDISTRIBUTION UNLESS OTHERWISE PERMITTED.

Exhibit AB-4 Page 1 of 8

Summary:

Consumers Energy Co.

Business Risk: EXCELLENT

Vulnerable Excellent

Financial Risk: SIGNIFICANT

Highly leveraged Minimal

a- a-bbb+

Anchor Modifiers Group/Gov't

Issuer Credit Rating

BBB+/Stable/A-2

Rationale

Business Risk: Excellent Financial Risk: Significant

• Lower-risk vertically integrated electric utility

operations and gas distribution operations.

• Above-average management of regulatory risk

compared to peers.

• Limited geographic and regulatory diversity with

operations concentrated in Michigan.

• Service territory with average economic growth.

• Large electric and natural gas customer base.

• We assess the company's financial measures using

our medial volatility table, reflecting the company's

lower-risk regulated electric and gas utility

operations and its effective management of

regulatory risk.

• Financial measures consistently reflect the higher

half of the range for its financial risk profile category.

• Elevated capital spending.

• Negative discretionary cash flow, indicating the

need for external funds.



Outlook: Stable

The stable rating outlook on Consumers Energy Co. and parent CMS Energy Corp. reflects S&P Global Ratings'

expectation that management will continue focusing on its core utility operations and reach constructive

regulatory outcomes to avoid any significant rise in business risk. The outlook also reflects our CMS Energy

base-case forecast level of adjusted funds from operations (FFO) to debt averaging around 16%, in line with the

current significant financial risk profile.

Downside scenario

We could lower ratings if the company's business risk profile weakens as a result of a decrease in regulatory

support or a material increase in non-utility operations. We could also lower ratings if core financial measures

consistently underperform our base-case forecast and remain consistently at less credit-supportive levels, including

adjusted FFO to total debt of less than 14%. This could occur if rate case outcomes are consistently weaker than

we expect, there is greater regulatory lag, or if capital spending increases and is primarily debt-financed.

Upside scenario

We could raise the ratings if the company's business risk profile remains robust and financial measures strengthen

and consistently exceed our base-case forecast, including adjusted FFO to total debt consistently over 18%.

Improved financial measures could occur through deleveraging, greater equity funding of capital investments, and

continuous cash flow support from rate case activity.

Our Base-Case Scenario

Assumptions Key Metrics

• Electric and gas rate increases and use of existing

regulatory mechanisms.

• Modest load growth.

• Average annual capital spending of about $2 billion

annually.

• Dividends of about $550 million annually.

• Moderately negative impact on cash flow impacts as

a result of the revised U.S. corporate tax code.

• All debt maturities refinanced.

• Our expectation that negative discretionary cash

flow will be debt financed.

2017A 2018E 2019E

FFO to debt (%) 25.1 21-24 20-23

Debt to EBITDA (x) 3.1 3-4 3-4

FFO cash interest coverage (x) 7.9 6-7 6-7

A--Actual. E—Estimated. FFO—Funds from

operations.


Summary: Consumers Energy Co.


Business Risk: Excellent

Our assessment of Consumers Energy's business risk profile reflects the company's lower-risk electric and natural gas

utility operations. Consumers Energy is a vertically integrated utility that generates, transmits, distributes, and sells

electricity. It also sells, stores, and transports natural gas. Consumers Energy has about 8,455 megawatts of generation

capacity, of which about 40% is derived from gas, about 25% from coal, about 10% from pumped storage, about 10%

from oil, about 10% from nuclear, and about 5% from renewables. The company has been strategically reducing its

environmental risks through coal plant retirements and increasing the proportion of natural gas and renewables in its

portfolio. The Consumers Energy is a large utility serving about 1.8 million electric customers and about 1.8 million

natural gas customers throughout Michigan. In addition, about 80% of the company's electric customer revenue base

is residential and commercial, thus providing a stable cash flow and mitigating the company's exposure to industrial

cyclicality. Consumers Energy is a wholly owned subsidiary of CMS Energy and contributes about 95% of CMS

Energy's operations.

The Michigan Public Service Commission (MPSC) regulates Consumers Energy. We view the regulatory environment

in Michigan as above average compared to peers as demonstrated through the company's benefit from

forward-looking test years and various constructive rate mechanisms that enable it to generally earn their allowed

returns on equity and minimize regulatory lag. Recently, the company received an electric rate increase of about $72

million and a natural gas rate increase of about $11 million. In addition, the company recently filed a settlement to its

outstanding electric rate case stipulating a $24 million rate decrease, incorporating the impacts of tax reform and

agreed to stay out of an electric rate case until 2020. The company is also requesting a gas rate increase of about $229

million. We expect rate orders by third quarter 2019.

Financial Risk: Significant

We assess Consumer Energy's financial measures using our medial volatility table, reflecting the company's lower-risk

regulated electric and gas utility operations and its effective management of regulatory risk. Under our base-case

scenario, we expect financial measures that are consistent with the higher half of the range for the company's financial

risk profile category. Specifically, we expect FFO to debt of about 20%-23%.

Liquidity: Adequate

Consumers Energy has adequate liquidity in our view and could more than cover its needs for the next 12 months

even if consolidated EBITDA declined by 10%. We expect Consumers Energy's liquidity sources over the next 12

months to exceed its uses by more than 1.1x. Under our stress scenario, we do not expect the company would require

access to capital markets during the period to meet its liquidity needs. Our assessment also reflects the company's

stable cash flow, generally prudent risk management, sound relationships with banks, and a generally satisfactory

standing in the credit markets.




Principal Liquidity Sources Principal Liquidity Uses

• Cash and liquid investments of about $250 million;

• Cash FFO of about $1.7 billion; and

• Credit facility availability of about $1.1 billion.

• Debt maturities, including outstanding commercial

paper, of about $400 million as of June 30, 2018;

• Maintenance capital spending of about $1.7 billion;

and

• Dividends of about $550 million.

Group Influence

Under our group rating methodology, we assess Consumers Energy to be a core subsidiary of CMS Energy, reflecting

our view that it is highly unlikely to be sold, plays an integral role to the overall group strategy, and possesses a

long-term commitment from senior management. As a result, we assess the issuer credit rating at Consumers Energy

as in line with CMS Energy's issuer credit rating.

Ratings Score Snapshot

Issuer Credit Rating

BBB+/Stable/A-2

Business risk: Excellent

• Country risk: Very low

• Industry risk: Very low

• Competitive position: Excellent

Financial risk: Significant

• Cash flow/Leverage: Significant

Anchor: a-

Modifiers

• Diversification/Portfolio effect: Neutral (no impact)

• Capital structure: Neutral (no impact)

• Financial policy: Neutral (no impact)

• Liquidity: Adequate (no impact)

• Management and governance: Satisfactory (no impact)

• Comparable rating analysis: Neutral (no impact)

Stand-alone credit profile : a-




• Group credit profile: bbb+

• Entity status within group: Core (-1 notch from SACP)

Issue Ratings--Recovery Analysis

• We assign recovery ratings to first-mortgage bonds (FMBs) issued by U.S. utilities, which can result in issue ratings

being notched above an issuer credit rating on a utility depending on the rating category and the extent of the

collateral coverage. The FMBs issued by U.S. utilities are a form of secured utility bond (SUB) that qualify for a

recovery rating as defined in our criteria.

• The recovery methodology is supported by our expectation of 100% recovery for secured bondholders in utility

bankruptcies in the U.S. and our view that the factors that enhance recoveries (limited size of the creditor class and

the durable value of utility rate-based assets during and after a reorganization given the essential service provided

and the high replacement cost) will persist.

• Under our SUB criteria, we calculate a ratio of our estimate of the value of the collateral pledged to bondholders

relative to the amount of FMBs outstanding. FMB ratings can exceed an issuer credit rating on a utility by up to one

notch in the 'A' category, two notches in the 'BBB' category, and three notches in speculative-grade categories

depending on the calculated ratio.

• Consumer Energy's FMBs benefit from a first-priority lien on substantially all of the utility's real property owned or

subsequently acquired. Collateral coverage of more than 1.5x supports a recovery rating of '1+' and an issue rating

two notches above the issuer credit rating.

Related Criteria

• Criteria - Corporates - General: Reflecting Subordination Risk In Corporate Issue Ratings, Sept. 21, 2017

• General Criteria: Methodology For Linking Long-Term And Short-Term Ratings, April 7, 2017

• Criteria - Corporates - General: Methodology And Assumptions: Liquidity Descriptors For Global Corporate Issuers,

Dec. 16, 2014

• Criteria - Corporates - General: Corporate Methodology: Ratios And Adjustments, Nov. 19, 2013

• Criteria - Corporates - General: Corporate Methodology, Nov. 19, 2013

• Criteria - Corporates - Utilities: Key Credit Factors For The Regulated Utilities Industry, Nov. 19, 2013

• General Criteria: Methodology: Industry Risk, Nov. 19, 2013

• General Criteria: Group Rating Methodology, Nov. 19, 2013

• General Criteria: Country Risk Assessment Methodology And Assumptions, Nov. 19, 2013

• Criteria - Corporates - Utilities: Collateral Coverage And Issue Notching Rules For '1+' And '1' Recovery Ratings On

Senior Bonds Secured By Utility Real Property, Feb. 14, 2013

• General Criteria: Methodology: Management And Governance Credit Factors For Corporate Entities And Insurers,

Nov. 13, 2012

• General Criteria: Use Of CreditWatch And Outlooks, Sept. 14, 2009




• Criteria - Insurance - General: Hybrid Capital Handbook: September 2008 Edition, Sept. 15, 2008

Business And Financial Risk Matrix

Business Risk Profile

Financial Risk Profile

Minimal Modest Intermediate Significant Aggressive Highly leveraged

Excellent aaa/aa+ aa a+/a a- bbb bbb-/bb+

Strong aa/aa- a+/a a-/bbb+ bbb bb+ bb

Satisfactory a/a- bbb+ bbb/bbb- bbb-/bb+ bb b+

Fair bbb/bbb- bbb- bb+ bb bb- b

Weak bb+ bb+ bb bb- b+ b/b-

Vulnerable bb- bb- bb-/b+ b+ b b-





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Residential ResidentialCommercial Secondary

Commercial Secondary

Commercial Secondary

Commercial Secondary Primary Primary Primary Primary Primary Primary Primary Primary Primary

Lighting & Unmetered



Lighting & Unmetered GSG

GPD GPD GPDGS GSD GPD GPD GPD GP GEI GEI GEI

Line Description Total RS RT GS GSD GEI GEI GP Vlt 1 Vlt 2 Vlt 3 GEI EIP Vlt 1 Vlt 2 Vlt 3 GML GUL GU-XL GU GSG(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) (17) (18) (19) (20) (21)

1 Total Rate Base ($000)1 10,668,437$ 5,203,993$ 22,778$ 1,615,541$ 1,222,053$ 51,918$ 102,909$ 296,668$ 408,394$ 344,509$ 1,111,265$ 51,331$ 22,788$ 5,544$ 14,742$ 70,884$ 5,010$ 93,766$ 12$ 18,234$ 6,098$

2 Percent of Total 100.00% 48.78% 0.21% 15.14% 11.45% 0.49% 0.96% 2.78% 3.83% 3.23% 10.42% 0.48% 0.21% 0.05% 0.14% 0.66% 0.05% 0.88% 0.00% 0.17% 0.06%

3 2020 Calculation C Amount2 (38,443,000)$ (18,752,241)$ (82,079)$ (5,821,495)$ (4,403,585)$ (187,083)$ (370,824)$ (1,069,022)$ (1,471,621)$ (1,241,414)$ (4,004,369)$ (184,968)$ (82,116)$ (19,979)$ (53,121)$ (255,427)$ (18,054)$ (337,881)$ (44)$ (65,705)$ (21,972)$ 4 2021 Calculation C Amount2 (48,027,000)$ (23,427,252)$ (102,541)$ (7,272,819)$ (5,501,417)$ (233,724)$ (463,273)$ (1,335,534)$ (1,838,502)$ (1,550,903)$ (5,002,675)$ (231,081)$ (102,587)$ (24,959)$ (66,364)$ (319,106)$ (22,555)$ (422,116)$ (55)$ (82,086)$ (27,450)$

5 10-Month Sales (MWh)3 26,172,629 9,655,942 44,647 2,822,120 2,811,583 80,444 201,953 977,761 2,942,742 1,908,604 4,062,153 161,764 1,207 37,167 46,240 213,459 14,571 98,766 11 68,158 23,337 6 Annual Sales (MWh)3 32,697,575 12,063,208 55,778 3,525,686 3,512,522 100,499 252,300 1,221,521 3,676,380 2,384,427 5,074,865 202,092 1,508 46,433 57,768 266,675 18,204 123,389 14 85,150 29,155

7 2020 Calculation C Rate ($ / kWh ) (0.00194)$ (0.00184)$ (0.00206)$ (0.00157)$ (0.00233)$ (0.00184)$ (0.00109)$ (0.00050)$ (0.00065)$ (0.00099)$ (0.00114)$ (0.06803)$ (0.00054)$ (0.00115)$ (0.00120)$ (0.00124)$ (0.00342)$ (0.00395)$ (0.00096)$ (0.00094)$ 8 2021 Calculation C Rate ($ / kWh ) (0.00194)$ (0.00184)$ (0.00206)$ (0.00157)$ (0.00233)$ (0.00184)$ (0.00109)$ (0.00050)$ (0.00065)$ (0.00099)$ (0.00114)$ (0.06803)$ (0.00054)$ (0.00115)$ (0.00120)$ (0.00124)$ (0.00342)$ (0.00395)$ (0.00096)$ (0.00094)$

Sources1 Docket No. U-20134. Exhibit A-16 (JCA-1) Schedule F-1. Uses 4CP 75%/0/25% production allocator.2 Gorman direct testimony at Exhibit AB-2, page 1.3 Credit A Filing. Docket No. U-20102, Settlement Agreement, Attachment A, page 1. Reflects total Bundled and Retail Open Access MWh.

10-Month sales volumes for each rate class are equal to the Annual Sales Volume x (2020 Calculation C Amount / 2021 Calculation C Amount).

CONSUMERS ENERGY COMPANYDevelopment of Calculation C - Electric


Line Description Total Residential GS-1 GS-2 GS-3 ST LT XLT(1) (2) (3) (4) (5) (6) (7) (8)

1 Total Rate Base ($000)1 5,468,042$ 3,839,751$ 479,835$ 510,072$ 102,645$ 152,126$ 119,824$ 263,789$

2 Percent of Total 100.00% 70.22% 8.78% 9.33% 1.88% 2.78% 2.19% 4.82%

3 2020 Calculation C Amount2 (4,729,000)$ (3,320,783)$ (414,982)$ (441,132)$ (88,772)$ (131,565)$ (103,629)$ (228,136)$ 4 2021 Calculation C Amount2 (17,063,000)$ (11,981,925)$ (1,497,323)$ (1,591,677)$ (320,303)$ (474,708)$ (373,910)$ (823,152)$

5 10-Months Throughput (MMcf)3 83,513 44,355 6,210 9,609 2,348 4,940 5,445 10,605 6 Annual Throughput (MMcf)3 301,329 160,042 22,407 34,671 8,472 17,825 19,648 38,264

7 2020 Calculation C Rate ($ / Mcf ) (0.07487)$ (0.06682)$ (0.04591)$ (0.03781)$ (0.02663)$ (0.01903)$ (0.02151)$ 8 2021 Calculation C Rate ($ / Mcf ) (0.07487)$ (0.06682)$ (0.04591)$ (0.03781)$ (0.02663)$ (0.01903)$ (0.02151)$

Sources1 Docket No. U-18424. Exhibit A-16 (LFS-2), Schedule F-1, page 3 of 6.2 Gorman direct testimony, Exhibit AB-2, page 2.3 Credit A filing. Docket No. U-20103, Exhibit A-2 (EAH-2), Schedule F-1, Page 1 of 5, line 27.

10-month throughput for each rate class is equal to the Annual Throughput x (2020 Calculation C Amount / 2021 Calculation C Amount).

CONSUMERS ENERGY COMPANYDevelopment of Calculation C - Gas

exhibit ab-1 page 1 of 2

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