Slide 1: Growing Forward Investor Meetings June 2009
Growing Forward Investor Meetings June 2009
Slide 2: Forward-looking statements
This presentation contains "forward-looking statements" as defined in Rule 3b-6 of the Securities Exchange Act of 1934, as amended, Rule 175 of the Securities Act of 1933, as amended, and relevant legal decisions. The forward-looking statements are subject to risks and uncertainties. They should be
Slide 3: Long-term Objectives
Consistent financial performance Fair and timely regulation Utility investment Customer value Safe, excellent operations 2 Long-term Objectives
Slide 4: Consumers Energy
Consumers Energy Fourth largest combination utility in the U.S. 1.8 million electric and 1.7 million gas customers 9,500 MW of owned and purchases generation capacity (summer) 946 MW Zeeland acquisition 800 MW new coal plant construction 307 Bcf of gas storage capacity including 142 Bcf of working s
Slide 5: Regulatory Timeline
Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb- 09 Mar-09 Regulatory Timeline November February April May June September November May Electric Rate Case U-15645 Filed Staff and intervenors file Rebuttals Self implemented Cross exam
Slide 6: Electric Rate Case
Electric Rate Case filed (November 2008) Self Implemented Amount (May 2009) Staff Position + Errors Staff Position (April 2009) 214 179 179 149 149 113 111 35 30 38 Electric Rate Case (Reconciliation) Revised Staff Position (May 2009) Staff Position + Adjustments Self Implement (May 2009) Electric R
Slide 7: Gas Rate Case
Gas Rate Case . . . . Company Request (mils) Investment $40 Sales 41 O&M 25 Cost of Capital 8 Total $114 Rate Base (bils) $2.9 Equity Ratio 48% Return on Equity 11% Requested Trackers: Decoupling mechanism Yes Uncollectibles Yes Pension Yes .. . . . filed May 22; self implementation possible in Nove
Slide 8: Renewable Energy Plan
Renewable Energy Plan . . . . 50 percent build / 50 percent Power Purchase Agreement Balanced approach 10 percent from renewables by 2015 Capital investment $1.2 billion by 2017 Surcharge September 2009 .. . . . approved by MPSC on May 26.
Slide 9: Energy Optimization Plan
Energy Optimization Plan . . . . Six-year plan: 2009-2014 Residential programs focused on Efficient products Weatherization Appliance recycling Early education Business programs focused on Lighting upgrades Operational changes to improve energy efficiency Custom programs for large users Reductions b
Slide 10: Sales and Unemployment
Sales and Unemployment Electric Sales (weather adjusted) Sales decline similar to recession in early 1980s; unemployment varies across the state. Michigan Unemployment 2009 1975 1986 1997 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 19
Slide 11: Electric Customer Base Diversified
Electric Customer Base Diversified . . . . Hemlock Semiconductor General Motors Delphi Corporation Pfizer Incorporated Meijer Incorporated State of Michigan Quanex Corporation Packaging Corporation of America Dow Corning Corporation Denso International Percent of 2008 total Company 3% Top Ten Custom
Slide 12: Balanced Energy Plan Summary
Balanced Energy Plan Summary Extensive analysis of alternatives and risks Diverse and balanced plan Meets 10% renewable portfolio standard by 2015 Meets energy efficiency target of 5.5% by 2015 Includes demand management programs Purchase of Zeeland natural gas plant Build new clean coal facility Re
Slide 13: 7% Utility Growth: Rate Base
2008 2009 2010 2011 2012 2031 Depreciation 7.851 8.729 8.486 7.922 7.592 7.123 6.597 Maintenance 0.574 1.132 1.644 2.117 2.616 Customer growth 0.077 0.156 0.244 0.337 0.431 Environmental 0.057 0.19 0.341 0.501 0.797 Zeeland plant 0.481 0.481 0.481 0.481 0.481 Gas compression and pipelines 0.064 0.14
Slide 14: Waxman-Markey Clean Energy Act
Waxman-Markey Clean Energy Act Year % Michigan % Renewables 2015 10 Energy Efficiency 2015 5.5 Carbon Greenhouse gas reduction below 2005 levels 2020 17% Carbon capture (if plant permitted after Jan 1 2009) 50% Industry allowances Electricity sector receives 35% of total allowances under cap for fre
Slide 15: Ford Motor Company Partnership
Ford Motor Company Partnership . . . . Vehicle Electrification Pilot Shape future of the electric vehicle market in U.S. Fifteen utilities to participate Project funding (utility) For infrastructure For fleet plug-in hybrid electric vehicles and battery electric vehicles MPSC support .. . . . Electr
Slide 16: What Makes CMS Different?
What Makes CMS Different? Recent State energy legislation provides framework for growth Diversified Utility investment opportunities boost rate base and EPS Timely regulation minimizes recovery lag Diversified customer base mitigates auto exposure Solid liquidity position NOL and AMT credits add val
Slide 17: Appendix
Appendix
Slide 18: Gas Rate Case U-15986
GAS RATE CASE U-15986* On May 22, 2009, Consumers Energy filed an application with the Michigan Public Service Commission seeking an increase in its gas delivery and transportation rates based on a 12 month ending September 30, 2010 test year. Due to the uncertainty related to the length and depth o
Slide 19: Electric Rate Case U-15645
ELECTRIC RATE CASE U-15645* On November 14, 2008, Consumers Energy filed an application with the Michigan Public Service Commission seeking an increase in its electric generation and distribution rates based on a 2009 test year. On May 29, 2009 the MPSC staff filed a revised position on Consumers En
Slide 20: Maturity Schedule of CMS and CECO Long-Term Debt
MATURITY SCHEDULE OF CMS AND CECO LONG-TERM DEBT & PREFERRED SECURITIES AS OF 04/30/2009 Maturity Amount F/V S/U or Call Date (000’s) DEBT/ CO SHORT-TERM DEBT: F S 08/15/09 $ 150,000 4.4% Series K FMBs (CECo) $ 150,000 LONG-TERM DEBT: F S 05/15/10 $ 250,000 4% $250MM FMBs (CECo) F S 06/15/10 30,000
Slide 21: Renewable Energy Today
Renewable Energy Today 2008 Energy Generation Mix 40,100 Mwh Wind Hydro Biomass Solid waste Anaerobic digester Landfill gas Nuclear (PPA) Renewables Coal MISO Purchase Natural Gas 17 5 45 19 14 382 MW of renewable resources provide 5% of total energy. a _ _ _ _ _ a Based on generation needed to serv
Slide 22: Consumers Electric Utility Financial & Operating Statistics
Consumers Electric Utility Financial & Operating Statistics Years Ended December 31 2008 2007 2006 2005 2004 ELECTRIC REVENUE AND POWER COSTS (Millions) Residential $1,414 $1,326 $1,279 $1,069 $ 996 Commercial 1,129 1,111 1,062 878 814 Industrial 810 775 764 553 523 Other 32 30 29 26 27 Total revenu
Slide 23: Consumers Electric Utility Supplemental Operating Statistics
Consumers Electric Utility Supplemental Operating Statistics Years Ended December 31 2008 2007 2006 2005 2004 2001 FUEL COST ($/MMBtu) Coal 2.01 2.04 2.09 1.78 1.43 1.38 Oil 11.54 8.21 8.68 5.98 4.68 4.02 Gas 10.94 10.29 8.92 9.76 10.07 4.05 Nuclear 0.00 0.42 0.24 0.34 0.33 0.39 Weighted average for
Slide 24: Consumers Gas Utility Financial & Operating Statistics
Consumers Gas Utility Financial & Operating Statistics 2008 2007 2006 2005 2004 GAS REVENUE AND COST OF GAS ($ Millions) Residential $1,971 $1,823 $1,646 $1,742 $1,466 Commercial 598 552 498 510 420 Industrial 124 113 111 116 94 Other 5 6 4 9 2 Total sales revenue $2,698 $2,494 $2,259 $2,377 $1,982
Slide 25: Independent Power Production Asset List
Independent Power Production Asset List Gross Primary Percentage of Gross Capacity CMS In-Service Capacity Under Long- No. Project Name MW MW Location Date Term Contract (%) Projects in Operation: * 1 Craven 50 25 Biomass N. Carolina 1990 0 * 2 DIG 710 710 Natural Gas Michigan 2001 92 * 3 Exeter 31