8-KOther EventsExhibits & Filings

CMS ENERGY CORP 8-K Report, Corporate Update (Oct 11, 2006)

Filed October 11, 2006For Securities:CMSCMS-PCCMSACMSCCMSD

Summary

CMS Energy Corporation (CMS) announced on October 11, 2006, a significant development through its subsidiary CMS Enterprises Company regarding the Prairie State Energy Campus project. This initiative involves a joint development with Peabody Energy Corp. for a 1,600-megawatt mine-mouth power plant located in southern Illinois. CMS Enterprises will hold a 15% indirect ownership in the project and will take on the primary responsibilities of lead developer, construction manager, and operator. This strategic move indicates CMS Energy's commitment to expanding its energy generation portfolio, particularly in new and potentially large-scale projects. However, the company notes that final participation is contingent upon several critical factors, including securing non-recourse project financing, a finalized engineering, procurement, and construction contract, and substantial long-term power purchase agreements.

Key Highlights

  • 1CMS Energy, through its subsidiary CMS Enterprises, is participating in the co-development of the 1,600 MW Prairie State Energy Campus.
  • 2The project is a mine-mouth power plant located in southern Illinois, in partnership with Peabody Energy Corp.
  • 3CMS Enterprises will hold a 15% indirect ownership in the project.
  • 4CMS Enterprises will serve as the lead developer, construction manager, and operator of the power plant.
  • 5Participation in the project is subject to achieving financial close, which requires securing non-recourse project financing.
  • 6Finalization of an engineering, procurement, and construction contract is a prerequisite for financial close.
  • 7Securing long-term power purchase agreements for a substantial portion of the project's output is also a condition for financial close.

Frequently Asked Questions

The Prairie State Energy Campus is a proposed 1,600-megawatt mine-mouth power plant project located in southern Illinois, being jointly developed with Peabody Energy Corp.

CMS Energy's wholly-owned indirect subsidiary, CMS Enterprises Company, will indirectly own 15% of the project and will be responsible for leading its development, construction management, and operation.

CMS Energy's participation is contingent upon achieving financial close. This requires securing non-recourse project financing, finalizing an engineering, procurement, and construction contract, and obtaining long-term power purchase agreements for a significant portion of the project's output.

The primary risks highlighted are the company's ability to secure the necessary non-recourse project financing, finalize construction contracts, and secure sufficient long-term power purchase agreements. The filing also refers to forward-looking statements being subject to risks and uncertainties detailed in the company's other SEC filings.