Variable Interest Entities

9 Months Ended

Sep. 30, 2026

Variable Interest Entity [Line Items]

In June 2026, NorthStar Clean Energy sold a Class A membership interest in HL Solar Holdings to a tax equity investor. HL Solar Holdings is the holding company of:

•a 100‑MW solar generation project in St. Clair County, Michigan, which achieved commercial operation in August 2026

•a 120‑MW solar generation project in Hart Township, Michigan, which achieved commercial operation in October 2026

The nameplate capacity of both projects has been committed under long-term renewable energy purchase agreements. During the nine months ended September 30, 2026, the tax equity investor contributed $24 million and recognized deemed contributions of $166 million associated with the projects being placed into service for tax purposes. In October 2026, the tax equity investor contributed $34 million and will contribute additional amounts in late 2026.

NorthStar Clean Energy consolidates this and other entities that it does not wholly own, but for which it manages and controls the entities’ operating activities. NorthStar Clean Energy is the primary beneficiary of these entities because it has the power to direct the activities that most significantly impact the economic performance of the companies, as well as the obligation to absorb losses or the right to receive benefits from the companies. NorthStar Clean Energy is pursuing the sale of several of these entities and

has classified their assets and liabilities as held for sale. For additional details of these entities, see Note 14, Exit Activities and Asset Sales.

Presented in the following table is information about the VIEs NorthStar Clean Energy consolidates and plans to hold going forward:


Consolidated VIE	NorthStar Clean Energy’s ownership interest	Description of VIE


BG Solar Holdings1	Class B membership interest	Holding company of a 200-MW solar generation project in Branch County, Michigan

HL Solar Holdings	Class B membership interest	Holding company of a 100‑MW solar generation project in St. Clair County, Michigan, and a 120‑MW solar generation project in Hart Township, Michigan

1During 2025, the tax equity investor contributed $15 million and recognized a deemed contribution of $35 million associated with BG Solar Holdings’ sale of investment tax credits related to a portion of the project placed into service for tax purposes in 2025. The remaining portion of the project was placed into service for tax purposes during 2026, and the tax equity investor recognized a deemed contribution of $87 million. In June 2026, the project achieved commercial operation and the tax equity investor contributed an additional $56 million.

For each of these VIEs, the Class A membership interest in the entity is held by a tax equity investor and is presented as noncontrolling interest on CMS Energy’s consolidated balance sheets. Under the associated limited liability company agreement, the tax equity investor is guaranteed preferred returns from the entity. Earnings, tax attributes, and cash flows generated by those entities are allocated among and distributed to the membership classes in accordance with the ratios specified in the associated limited liability company agreements; these ratios change over time and are not representative of the ownership interest percentages of each membership class. Since these entities’ income and cash flows are not distributed among their investors based on ownership interest percentages, NorthStar Clean Energy allocates the entities’ income (loss) among the investors by applying the hypothetical liquidation at book value method. This method calculates each investor’s earnings based on a hypothetical liquidation of the entities at the net book value of underlying assets as of the balance sheet date. The liquidation tax gain (loss) is allocated to each investor’s capital account, resulting in income (loss) equal to the period change in the investor’s capital account balance.

Presented in the following table are the carrying values of assets and liabilities associated with consolidated VIEs included on CMS Energy’s consolidated balance sheets:


In Millions
	September 30, 2026			December 31, 2025
Current
Cash and cash equivalents		$	13		$	20
Restricted cash and cash equivalents		33			19
Accounts receivable		167			42
Assets held for sale		39			—
Prepayments and other current assets		—			5
Non-current
Plant, property, and equipment, net		594			1,037
Construction work in progress		246			357
Assets held for sale		686			—
Other non-current assets		22			5
Total assets1		$	1,800		$	1,485
Current
Current portion of long-term debt and finance leases		$	155		$	65
Accounts payable		23			29

Liabilities held for sale		11			—

Non-current
Long-term debt		130			118
Non-current portion of finance leases		29			39
AROs		9			38
Liabilities held for sale		59			—
Other non-current liabilities		4			3
Total liabilities		$	420		$	292

1Assets may be used only to meet VIEs’ obligations and commitments.

NorthStar Clean Energy is obligated under certain indemnities that protect the tax equity investors against losses incurred as a result of breaches of representations and warranties under the associated limited liability company agreements. For additional details on these indemnity obligations, see Note 3, Contingencies and Commitments—Guarantees.

Consumers’ wholly owned subsidiaries, Consumers 2014 Securitization Funding and Consumers 2023 Securitization Funding, are VIEs designed to collateralize Consumers’ securitization bonds. These entities are considered VIEs primarily because their equity capitalization is insufficient to support their operations. Consumers is the primary beneficiary of and consolidates these VIEs, as it has the power to direct the activities that most significantly impact the economic performance of the companies, as well as the obligation to absorb losses or the right to receive benefits from the companies. The VIEs’ primary assets and liabilities comprise non-current regulatory assets and long-term debt. The carrying value of the regulatory assets on Consumers’ consolidated balance sheets was $458 million at September 30, 2026 and $549 million at December 31, 2025. The carrying value of securitization bonds on Consumers’ consolidated balance sheets was $479 million at September 30, 2026 and $585 million at December 31, 2025.

Consumers Energy Company