8-KMaterial Agreements

CMS ENERGY CORP 8-K Report, Material Agreement (Jul 15, 2011)

Filed July 15, 2011For Securities:CMSCMS-PCCMSACMSCCMSD

Summary

CMS Energy Corporation (CMS), through its subsidiary Consumers Energy Company, has entered into a settlement agreement with the United States regarding a lawsuit filed in 2002. This lawsuit concerned the Department of Energy's (DOE) failure to fulfill its obligations under the Nuclear Waste Policy Act to accept spent nuclear fuel. The settlement, finalized on July 11, 2011, involves the U.S. government paying $120 million to the Nuclear Waste Fund (NWF) as a credit towards Consumers Energy's fee obligation. Consumers Energy has paid the remaining approximately $43 million of its obligation directly to the NWF. While the company must file with the Michigan Public Service Commission (MPSC) to address the settlement, it does not anticipate a material impact on its quarterly earnings. The company expects to recover regulatory assets associated with these costs and anticipates refunding certain previously recovered customer amounts.

Key Highlights

  • 1CMS Energy's subsidiary, Consumers Energy, settled a lawsuit against the U.S. Department of Energy for $120 million.
  • 2The lawsuit stemmed from the DOE's failure to accept spent nuclear fuel as required by the Nuclear Waste Policy Act.
  • 3The settlement payment of $120 million will be credited towards Consumers Energy's fee obligation to the Nuclear Waste Fund (NWF).
  • 4Consumers Energy paid the remaining ~$43 million of its NWF obligation directly.
  • 5The company does not expect the settlement to have a material impact on its quarterly earnings.
  • 6Consumers Energy will file with the Michigan Public Service Commission (MPSC) to address the settlement.
  • 7The company anticipates refunding certain amounts to customers that were previously recovered.

Frequently Asked Questions

Consumers Energy sued the U.S. Department of Energy (DOE) because the DOE failed to meet its contractual and statutory obligations under the Nuclear Waste Policy Act to begin accepting spent nuclear fuel by January 31, 1998.

The settlement agreement is for $120 million. This amount is paid by the U.S. government into the Nuclear Waste Fund (NWF) as a credit towards Consumers Energy's one-time fee obligation of approximately $163 million. Consumers Energy paid the remaining balance of about $43 million directly to the NWF.

CMS Energy, through Consumers Energy, does not expect the settlement to have a material impact on its quarterly earnings. The company carries a regulatory asset for these costs and its MPSC filing will reflect the recovery of these assets.

Consumers Energy anticipates refunding certain amounts to customers. These are amounts that were previously recovered from customers through rates, related to costs that are now being addressed through this settlement.