About Consumers Energy Company

Consumers Energy Company makes sure that energy consumers in Michigan have the power to crank up their heaters and the gas to fire up their stoves. The company's operating area includes all 68 counties of Michigan's lower peninsula. All told, Consumers Energy (the primary operating unit of CMS Energy) has a generating capacity of more than 5,600 MW (primarily fossil-fueled), and distributes electricity to 1.8 million customers and natural gas to 1.8 million customers. Included in the utility's arsenal of power production is electricity generated from coal, natural gas, wind, and hydroelectric power plants. Utility customers are a mix of residential, commercial, and diversified industrial clients.

Operations

Consumers Energy is the regulated utility subsidiary of CMS Energy.

Electric utility operations (70% of revenue) include the generation, purchase, distribution, and sale of electricity. It owns some dozen power generation facilities and purchased some 2,700 MW from third parties. It shuttered seven of its smaller coal-fired plants in 2016 and is replacing some of the lost capacity with gas-fired facilities. The company's electric distribution system has more than 60,000 miles of electric lines.

Its gas utility operations (30%) include the purchase, transmission, storage, distribution, and sale of natural gas. The gas distribution system delivers roughly 350 billion cubic feet of natural gas per year

Geographic Reach

Consumers provides electric service to 275 cities and villages in 61 counties in Michigan. Principal cities served are Battle Creek, Bay City, Cadillac, Flint, Grand Rapids, Jackson, Kalamazoo, Midland, Muskegon and Saginaw.

Consumers gas business purchases about 5% of its gas from Canadian sources and the rest from US suppliers, including several along the US Gulf Coast. It serves a 13,000-square mile area that includes more than 200 cities and villages. More than one half of its customers are in metro Detroit.

Sales and Marketing

The company serves 1.8 million electric customers and 1.8 million gas customers in Michigan's Lower Peninsula.

The company serves residential, commercial, industrial, and other customers. Though it is a regulated utility Consumers Energy is open to electricity competition in its service area at a rate of up to 10% of its previous year’s retail sales. Gas competition also exists from Gulf Coast companies as well as alternative fuels such as propane, oil, and electricity.

Financial Performance

Consumers Energy's overall revenue decreased by almost 2% (reflecting lower gas prices and sales volumes) in 2016 to $6.1 billion, and its net income increased by about 4% to $616 million.

From a net income perspective, electric operating revenues increased by $122 million, reflecting $91 million from rate increases, and a $62 million increase in sales due to favorable weather. These increases were partially offset by a $25 million net decrease in securitization revenue, and a $6 million drop in other revenue.

Gas operating revenue increased by $15 million, reflecting $33 million from a 2016 rate increase, offset partially by an $18 million decrease in sales due to milder winter weather.

Net cash provided by operating activities dropped from $1.8 million to $1.7 million. This decline was due to lower customer collections, offset partially by higher income tax payments to CMS Energy, lower post-retirement benefits contributions, and higher net income.

Strategy

Addressing new regulatory mandates, Consumers is making big changes its energy generation mix, mostly from coal to natural gas. In 2016, after retiring seven of its smaller coal-fired plants (representing 950 MW of capacity) the percent of power coming from the black commodity dropped from 79% to 58%. That same year, Consumers adjusted a Power Purchase Agreement (PPA) with an Entergy nuclear plant to terminate the agreement in May 2018, four years ahead of schedule. The lost capacity will be replaced with the output of Consumers’ 2015-acquired 540 MW gas-fueled plant in Jackson, MI, along with a reduction in consumer demand, updated PPA agreements, and power from renewable energy sources.

Consumers informed state regulators in 2017 that it is interested in acquiring an additional gas-fired electricity plant in Michigan. As well, the utility broke ground on its third wind energy project, Cross Winds Energy Park II, in Tuscola County. Phase I is expected to have 19 turbines capable of generating 44 MW of electricity and will commence service in early 2018. When completed it will have more than 80 wind turbines and 155 MW of energy production (enough to serve 60,000 residents).

Consumers gas business is working on a $610 million, 5-year project to replace 78 miles of gas pipe dating to the 1940s and located in Saginaw, Genesee, and Oakland counties. Construction began in mid-2017 and will continue until the end of 2022. Additional capital is being deployed to address anticipated growth, installing new pipes to serve an increase of nearly 8,000 new business customers and 2,500 residential customers in its service area.

 

 

To improve its bottom line and the efficiency of its operations, and in an effort to stem the tide of commercial and residential customers jumping ship for other electricity providers, Consumers Energy is looking at options to reform its rate structures.

The company is being guided by its "Balanced Energy Initiative," a comprehensive 20 year plan (introduced in 2007). The plan calls for the utility to develop new power plants, increase the efficiency of its operations, and expand its renewable energy projects.

Consumers anticipates a continued rise in industrial production in its service territory will drive its total electric deliveries to increase annually by 0.5% through 2021. Excluding the impacts of energy efficiency programs, the company expects its total electric deliveries to increase by 1% a year over the same time period. It also expects that its gas deliveries will remain stable through 2021, reflecting growth in gas demand being offset by energy efficiency and conservation activities.

The company's planned base capital investments of $4.6 billion in 2017 include $2.6 billion to preserve electric utility reliability and capacity and $2 billion at the gas utility to sustain the delivery system and enhance pipeline integrity.

Between 2012 and 2017 the company installed smart meters (advanced meters that allow customers to have better control over their energy use) across its electric power distribution system.

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Consumers Energy Company

1 Energy Plaza Dr
Jackson, MI 49201-2357
Phone: 1 (517) 788-0550
Fax: 1 (517) 788-1682

Stats

  • Employer Type: Subsidiary
  • Stock Symbol: CMSpB
  • Stock Exchange: NYSE
  • President and CEO: Patricia K. Poppe
  • Chairman: John G. Russell
  • EVP and CFO: Thomas J. Webb
  • 2016 Employees: 7,366

Major Office Locations

  • Jackson, MI

Other Locations

  • Sterling, CT
  • Washington, DC
  • Armada, MI
  • Battle Creek, MI
  • Bay City, MI
  • Benzonia, MI
  • Big Rapids, MI
  • Boyne City, MI
  • Cadillac, MI
  • Clinton Township, MI
  • East Tawas, MI
  • Essexville, MI
  • Gaylord, MI
  • Grand Rapids, MI
  • Grayling, MI
  • Hamilton, MI
  • Hastings, MI
  • Ira, MI
  • Kalamazoo, MI
  • Lansing, MI
  • Ludington, MI
  • Manchester, MI
  • Marion, MI
  • Marshall, MI
  • Midland, MI
  • Mount Morris, MI
  • Muskegon, MI
  • Newaygo, MI
  • Northville, MI
  • Oscoda, MI
  • Royal Oak, MI
  • Saginaw, MI
  • Temperance, MI
  • Traverse City, MI
  • Wellston, MI
  • West Olive, MI
  • White Pigeon, MI
  • Lakewood, NJ
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