<PAGE>

                                    FORM 10-K
                United States Securities and Exchange Commission
                             Washington, D.C. 20549

                        FOR ANNUAL AND TRANSITION REPORTS
                      PURSUANT TO SECTIONS 13 OR 15d OF THE
                         SECURITIES EXCHANGE ACT OF 1934

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                     EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                      For the year ended December 31, 2003

OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

         For the transition period from __________ to __________

<TABLE>
<CAPTION>
Commission File         Registrant; State of Incorporation;                  IRS Employer
    Number                 Address and Telephone Number                   Identification No.
----------------        ------------------------------------------        --------------------
<S>                     <C>                                               <C>
333-47938                  Consumers Funding LLC                          38-3575109
                           A Delaware limited liability company
                           One Energy Plaza
                           Jackson, Michigan 49201
                           (517) 788-0250
</TABLE>

         Securities registered pursuant to Section 12 (b) of the Act: None.

         Securities registered pursuant to Section 12 (g) of the Act: None.

         Indicate by check mark whether the Registrant (1) has filed all reports
         required to be filed by Section 13 or 15(d) of the Securities Exchange
         Act of 1934 during the preceding 12 months (or for such shorter period
         that the Registrant was required to file such reports), and (2) has
         been subject to such filing requirements for the past 90 days. YES [X]
         NO [ ]

         Indicate by check mark if disclosure of delinquent filers pursuant to
         Item 405 of Regulation S-K is not contained herein, and will not be
         contained, to the best of Registrant's knowledge, in definitive proxy
         or information statements incorporated by reference in Part III of this
         form 10-K or any amendment to this Form 10-K. [ ]

         Indicate by check mark whether the registrant is an accelerated filer
         (as defined in rule 12b-2 of the Exchange Act). YES [ ] NO [X]

         Consumers Funding LLC meets the conditions set forth in General
         Instruction I(1)(a) and (b) of the Form 10-K and is, therefore filing
         this Form 10-K with the reduced disclosure format. In accordance with
         Instruction I, Part I, Item 2 has been reduced.

         The aggregate market value of the voting and non-voting common equity
         held by non-affiliates of the Registrant: None.

<PAGE>

                             CONSUMERS FUNDING, LLC
                           FORM 10-K ANNUAL REPORT TO
                     THE SECURITIES AND EXCHANGE COMMISSION
                      FOR THE YEAR ENDED DECEMBER 31, 2003
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                             Page
                                                                                                             ----
<S>                                                                                                          <C>
PART I:  Financial Information

1.   Management's Narrative Analysis of Results of Operations.............................................       3

2.   Financial Statements and Supplementary Data

         Statements of Income.............................................................................       5
         Balance Sheets...................................................................................       6
         Statements of Cash Flows.........................................................................       7
         Statements of Member's Equity....................................................................       8
         Notes to Financial Statements....................................................................       9
         Report of Independent Auditors...................................................................      13

PART II:  Other Information

3.   Item 1.     Legal Proceedings .......................................................................      15
     Item 5.     Other Information .......................................................................      15
     Item 6.     Exhibits, and Reports on Form 8-K........................................................      15
     Item 7A.    Quantitative and Qualitative Disclosures About Market Risk...............................      15
     Signatures...........................................................................................      16
     Exhibit Index........................................................................................      17
</TABLE>

2

<PAGE>

                              CONSUMERS FUNDING LLC
                         MANAGEMENT'S NARRATIVE ANALYSIS
                             OF RESULTS OF OPERATION

This Management's Narrative Analysis (MNA) of the results of operations of
Consumers Funding LLC (Consumers Funding) is an abbreviated format pursuant to
Instruction I(1)(a) and (b) of Form 10-K. The MNA refers to Consumers Funding's
Notes to Financial Statements and should be read in conjunction with such
Financial Statements and Notes.

This Form 10-K and other written and oral statements from Consumers Funding
contain forward-looking statements as defined in Rule 3b-6 of the Securities
Exchange Act of 1934, as amended and Rule 175 of the Securities Act of 1933, as
amended. Consumers Funding's intention with the use of words such as "may,"
"could," "anticipates," "believes," "estimates," "expects," "intends," "plans,"
and other similar words is to identify forward-looking statements that involve
risk and uncertainty. Consumers Funding designed this discussion of potential
risks and uncertainties to highlight important factors that may impact its
business and financial outlook. Consumers Funding has no obligation to update or
revise forward-looking statements regardless of whether new information, future
events or any other factors affect the information contained in the statements.
These forward-looking statements are subject to various factors that could cause
Consumers Funding's actual results to differ materially from the results
anticipated in these statements.

Consumers Funding, a Delaware limited liability company, whose sole member is
Consumers Energy Company (Consumers), was formed by Consumers on October 11,
2000. Consumers is an electric and gas utility and is a wholly owned subsidiary
of CMS Energy Corporation. Consumers Funding was organized for the purposes of
purchasing and owning securitization property (see below), issuing
securitization bonds, pledging its interest in securitization property and other
collateral to the trustee to collateralize the securitization bonds, and
performing activities that are necessary, suitable or convenient to accomplish
these purposes.

On November 8, 2001, Consumers Funding issued $468.6 million of securitization
bonds. Consumers Funding used the proceeds from the securitization bond issuance
to purchase securitization property from Consumers. As discussed in Note 1 to
the Financial Statements, securitization property represents the irrevocable
right of Consumers to collect a nonbypassable securitization charge
(Securitization Charge) from customers in accordance with a financing order
issued by the Michigan Public Service Commission (MPSC). The securitization
property, which is classified as a securitization receivable, along with
earnings on cash deposited with the trustee, resulted in Consumers Funding
recording $22 million, $22.9 million, and $3.4 million of interest income in
2003, 2002, and 2001, respectively. Interest expense associated with the
securitization bonds totaled $22 million, $22.9 million, and $3.4 million in
2003, 2002, and 2001, respectively.

Consumers, as servicer, began billing a Securitization Charge to electric
customers beginning with its December 2001 billing cycle, totaling $.001427 per
kilowatt-hour, per customer, per billing cycle. In the servicing agreement
between Consumers Funding and Consumers, Consumers is required to remit its
Securitization Charge collections to the trustee each business day. Under the
servicing agreement, Consumers is required to request periodic Securitization
Charge adjustments from the MPSC. The request for an adjustment must be
submitted at least 45 days before the adjustment may take place. Adjustments
will be made annually, and then quarterly beginning approximately one year
before the expected final payment date of the last maturing class of
securitization bonds. Adjustments to the Securitization Charge are based, among
other things, on actual Securitization Charge revenue collections and updated
assumptions by Consumers as to projected future deliveries of electricity to
customers.

The initial request for annual adjustment was submitted on October 15, 2002 and
approved by the MPSC on November 7, 2002. The new surcharge became effective
with the December 2002 billing cycle and was $0.001328 per kilowatt-hour, per
customer, per billing cycle. On October 16, 2003, Consumers submitted a

3

<PAGE>

request to the MPSC for its annual adjustment. The approved adjustment revised
the Securitization Charge to $.001299, effective with the December 2003 billing
cycle.

For the year ended December 31, 2003, operating revenues totaled $23.2 million,
a decrease of approximately $1 million compared to 2002. Included in the $23.2
million is $22 million of interest income and approximately $1.2 of other
operating revenue. The decrease in total operating revenues for the year
primarily reflects lower interest income associated with the reduction in the
securitization receivable from Consumers Energy.

For the year 2003, Consumers Funding incurred $23.2 million of operating
expenses, a decrease of approximately $1 million compared to 2002. Included in
the $23.2 million is $22 million of interest expense and approximately $1.2
million of servicing, administration and other expenses. The decrease in
operating expenses for the year is primarily the result of reduced debt levels.

For the year ended December 31, 2002, operating revenues totaled $24.2 million,
an increase of approximately $20.7 million compared to 2001. Included in the
$24.2 million is $22.9 million of interest income and approximately $1.3 of
other operating revenue. The increase in total operating revenues for the year
primarily reflects a full year of interest income associated with the
securitization receivable from Consumers Energy.

For the year 2002, Consumers Funding incurred $24.2 million of operating
expenses, an increase of approximately $20.7 million compared to 2001. Included
in the $24.2 million is $22.9 million of interest expense and approximately $1.3
million of servicing, administration and other expenses. The increase in
operating expenses for the year is primarily the result of a full year of
interest expense associated with the securitization bonds payable.

4

<PAGE>

                              CONSUMERS FUNDING LLC
                              STATEMENTS OF INCOME

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31                                                        2003           2002        2001
----------------------------------------------------------------------------------------------------------------
                                                                                                    In Thousands
<S>                                                                         <C>            <C>        <C>
OPERATING REVENUES

    Interest Income - Consumers Energy                                      $ 22,012       $ 22,882   $    3,389
    Other Operating Revenue - Consumers Energy                                 1,171          1,358          129
    Other Operating Revenue                                                       66             23            -
                                                                            ------------------------------------

Total Operating Revenues                                                      23,249         24,263        3,518
----------------------------------------------------------------------------------------------------------------

OPERATING EXPENSES

    Interest Expense                                                          22,012         22,882        3,389
    Service Fee - Consumers Energy                                             1,091          1,274          117
    Administration Fee - Consumers Energy                                         80             84           12
    Other                                                                         66             23            -
                                                                            ------------------------------------

Total Operating Expenses                                                      23,249         24,263        3,518
----------------------------------------------------------------------------------------------------------------

NET INCOME                                                                  $      -       $      -   $        -
================================================================================================================
</TABLE>

The accompanying notes are an integral part of these statements.

5

<PAGE>

                              CONSUMERS FUNDING LLC
                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                                DECEMBER 31
                                                                                            2003          2002
----------------------------------------------------------------------------------------------------------------
                                                                                                    In Thousands
<S>                                                                                   <C>             <C>
ASSETS

CURRENT ASSETS

  Restricted Cash                                                                     $   17,045      $   17,411
  Securitization Receivable - Consumers Energy                                            27,361          26,402
                                                                                      --------------------------
  Total Current Assets                                                                    44,406          43,813

NON-CURRENT ASSETS

  Securitization Receivable - Consumers Energy                                           388,459         416,245
                                                                                      --------------------------
  Total Non-current Assets                                                               388,459         416,245
----------------------------------------------------------------------------------------------------------------

TOTAL ASSETS                                                                           $ 432,865      $ 460,058
===============================================================================================================

LIABILITIES AND MEMBER'S EQUITY

CURRENT LIABILITIES
  Securitization Bonds Payable                                                        $   27,786      $   26,905
  Accounts Payable - Consumers Energy                                                        305             314
  Accounts Payable - Other                                                                    32               2
  Interest Payable                                                                         4,148           4,457
                                                                                      --------------------------
  Total Current Liabilities                                                               32,271          31,678
----------------------------------------------------------------------------------------------------------------

NON-CURRENT LIABILITIES

  Securitization Bonds Payable                                                           398,251         426,037
                                                                                      --------------------------
  Total Non-current Liabilities                                                          398,251         426,037
----------------------------------------------------------------------------------------------------------------

MEMBER'S EQUITY

   Total Member's Equity                                                                   2,343           2,343
                                                                                      --------------------------

TOTAL LIABILITIES AND MEMBER'S EQUITY                                                  $ 432,865       $ 460,058
================================================================================================================
</TABLE>

The accompanying notes are an integral part of these statements.

6

<PAGE>

                              CONSUMERS FUNDING LLC
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31                                                     2003            2002          2001
-----------------------------------------------------------------------------------------------------------------
                                                                                                     In Thousands
<S>                                                                    <C>             <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES

Net income                                                             $          -    $          -  $          -

Changes in Current Assets and Liabilities:
Interest Receivable - Consumers Energy                                            -           2,257        (2,257)
Interest Payable                                                               (309)          1,068         3,389
Accounts Payable - Consumers Energy                                              (9)            185           129
Accounts Payable - Other                                                         30               2             -
                                                                       ------------------------------------------

NET CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES                            (288)          3,512         1,261
CASH FLOWS FROM INVESTING ACTIVITIES

Restricted Cash                                                                 366         (13,807)       (3,604)
Purchase of Securitization Property                                               -               -      (468,592)
Reduction of Securitization Receivable                                       26,827          25,945             -
                                                                       ------------------------------------------

NET CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES                           27,193         12,138      (472,196)

CASH FLOWS FROM FINANCING ACTIVITIES

Issuance of Bonds                                                                 -               -       468,592
Securitization Bonds Payable                                                (26,905)        (15,650)            -
Member's Investment                                                               -               -         2,343
                                                                       ------------------------------------------

NET CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES                         (26,905)        (15,650)      470,935

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS                              -               -             -

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                    -               -             -
                                                                       ------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                               $          -      $           $
=================================================================================================================
</TABLE>

The accompanying notes are an integral part of these statements.

7

<PAGE>

                              CONSUMERS FUNDING LLC
                          STATEMENTS OF MEMBER'S EQUITY

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31                                                          2003          2002       2001
-----------------------------------------------------------------------------------------------------------------
                                                                                                     In Thousands
<S>                                                                         <C>             <C>      <C>
BALANCE AT BEGINNING OF PERIOD                                              $  2,343        $ 2,343  $          -

Add:

  Net Income                                                                       -              -             -
  Member's Investment                                                              -              -         2,343
                                                                            ------------------------------------

BALANCE AT END OF PERIOD                                                    $  2,343        $ 2,343  $      2,343
                                                                            =====================================
</TABLE>

The accompanying notes are an integral part of these statements.

8

<PAGE>

                              CONSUMERS FUNDING LLC

                          NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION AND NATURE OF OPERATIONS

Consumers Funding, a Delaware limited liability company, whose sole member is
Consumers, was formed by Consumers on October 11, 2000. On January 22, 2001,
Consumers completed a $1,000 equity contribution to Consumers Funding. Consumers
is an electric and gas utility and is a wholly owned subsidiary of CMS Energy
Corporation. Consumers Funding was organized for the purposes of purchasing and
owning securitization property (see below), issuing securitization bonds,
pledging its interest in securitization property and other collateral to the
trustee to collateralize the securitization bonds, and performing activities
that are necessary, suitable or convenient to accomplish these purposes.

Securitization property represents the irrevocable right of Consumers, or its
successor or assignee, to collect a nonbypassable Securitization Charge from
customers in accordance with an October 24, 2000 MPSC Financing Order (MPSC
Financing Order). As modified by rehearing on January 4, 2001, the MPSC
Financing Order authorizes the Securitization Charge to be sufficient to recover
$468.6 million aggregate principal amount of securitization bonds, plus an
amount sufficient to provide for any credit enhancement, to fund any reserves
and to pay interest, redemption premiums, if any, servicing fees and other
expenses relating to the securitization bonds. For financial reporting purposes,
the purchase of the securitization property has been accounted for as a
financing arrangement by Consumers Funding in the amount of $468.6 million.
Accordingly, Consumers Funding has classified the purchase of securitization
property as a securitization receivable from Consumers in the financial
statements.

Consumers Funding's organizational documents require it to operate in a manner
so that it would not be consolidated into the bankruptcy estate of Consumers in
the event Consumers becomes subject to a bankruptcy proceeding. Consumers and
Consumers Funding have agreed that in the event of Consumers' bankruptcy, the
parties will treat the transfer of the securitization property to Consumers
Funding as a true sale. The securitization bonds are treated as debt obligations
of Consumers Funding. For financial reporting, Federal income tax and State of
Michigan and franchise tax purposes, the transfer of securitization property to
Consumers Funding is treated as part of a financing arrangement and not as a
sale. Furthermore, the results of operations of Consumers Funding are
consolidated with Consumers' financial statements for financial and income tax
reporting purposes.

Consumers Funding is legally separate from Consumers. The assets and income of
Consumers Funding, including without limitation, the securitization property,
are not available to creditors of Consumers or CMS Energy Corporation.

On November 8, 2001, Consumers Funding issued $468.6 million of securitization
bonds, Series 2001-1, in six different classes. Consumers Funding used the
proceeds to fund the purchase of securitization property from Consumers. The
principal amount of the securitization bonds, interest, fees and required
overcollateralization for the securitization bonds, will be recovered through
Securitization Charges collected from electric retail customers taking delivery
of electricity from Consumers or its successor based on MPSC approved rate
schedules and as permitted by contracts between Consumers and certain specific
customers.

Consumers, as servicer, collects Securitization Charges from its customers and
deposits collections daily into the General Subaccount held by the trustee (The
Bank of New York). The trustee is required to use these funds to make principal
and interest payments on the securitization bonds and to pay certain fees and
expenses of Consumers Funding.

9

<PAGE>

Consumers Funding has no employees. Under the servicing agreement with
Consumers, Consumers is required to manage and administer the securitization
property and to collect Securitization Charges on Consumers Funding's behalf.
Consumers receives a monthly servicing fee of one twelfth times 0.25 percent of
the principal amount of securitization bonds outstanding as of the payment date.
The servicing agreement also requires Consumers to file annual Securitization
Charge adjustment requests with the MPSC. These Securitization Charge adjustment
requests are based on actual Securitization Charge revenue collections and
Consumers' updated assumptions as to projected future deliveries of electricity
to customers, expected delinquencies and write-offs, future payments and
expenses relating to securitization property and the securitization bonds, any
deficiency in the Capital or Overcollateralization Subaccounts and any amounts
on deposit in the Reserve Subaccount.

2. SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions. These estimates and assumptions affect the reported amount of
revenues, expenses, assets, and liabilities and disclosure of contingencies.
Actual results could differ from these estimates.

INCOME TAXES

Consumers Funding has elected not to be taxed as a corporation for Federal
income tax purposes. Consumers Funding is treated as a division of Consumers,
and accordingly, will not be treated as a separate taxable entity.

RESTRICTED CASH

The trustee has established the following subaccounts for the securitization
bonds.

GENERAL SUBACCOUNT: The General Subaccount is comprised of Securitization Charge
collections and interest earned from short-term investments. These amounts
accumulate until the trustee pays principal, interest, service and
administration fees and other expenses. At December 31, 2003 and December 31,
2002, the General Subaccount totaled $12.2 million and $13.2 million,
respectively. These funds are used by the trustee for the scheduled payments of
principal and interest to bondholders and to pay expenses of Consumers Funding.

RESERVE SUBACCOUNT: The Reserve Subaccount includes any Securitization Charge
collections in excess of the amounts required in the General,
Overcollateralization and Capital Subaccounts. The trustee will draw funds from
this subaccount if the General Subaccount is insufficient to make scheduled
payments. At December 31, 2003, and December 31, 2002, the Reserve Subaccount
totaled approximately $2.2 million and approximately $1.7 million, respectively.

OVERCOLLATERALIZATION SUBACCOUNT: On each payment date, the trustee will deposit
in the Overcollateralization Subaccount a predetermined, specified amount so
that the account balance ultimately reaches the required amount of $2.3 million,
which represents 0.5 percent of the initial outstanding principal balance of the
securitization bonds. If amounts available in the General Subaccount and the
Reserve Subaccount are not sufficient on any payment date to make scheduled
payments to the securitization bondholders and to pay the required expenses,
fees and charges, the trustee will draw on the amounts in the
Overcollateralization Subaccount to make those payments. At December 31, 2003
and December 31, 2002, the Overcollateralization Subaccount totaled
approximately $338,000 and $168,000, respectively.

CAPITAL SUBACCOUNT: The Capital Subaccount was established on November 8, 2001.
Consumers deposited $2.3 million into the Capital Subaccount, an amount equal to
0.5 percent of the initial principal balance of the

10

<PAGE>

securitization bonds. If amounts available in the General Subaccount, the
Reserve Subaccount and the Overcollateralization Subaccount are not sufficient
on any payment date to make scheduled payments of principal and interest to the
securitization bondholders and to pay the expenses, fees and charges of
Consumers Funding, the trustee will draw on amounts in the Capital Subaccount to
make those payments. At December 31, 2003 and December 31, 2002, the Capital
Subaccount contained a balance of $2.3 million and $2.3 million, respectively.

3. LONG-TERM DEBT

On November 8, 2001, Consumers Funding issued $468.6 million of securitization
bonds, in six classes at interest rates ranging from 2.59 percent to 5.76
percent. Consumers Funding used the proceeds from the securitization bonds to
purchase securitization property from Consumers. As of December 31, 2003,
Consumers Funding has retired all of the class A-1 securitization bonds and
$16.6 million of the class A-2 securitization bonds in accordance with the bond
amortization schedule.

Scheduled maturities and interest rates for the remaining securitization bonds
at December 31, 2003 are as follows:

<TABLE>
<CAPTION>
                                                      Expected
                                     Principal          Final                 Final
                  Bond                Balance          Payment               Maturity
Class             Rate            (in thousands)         Date                  Date
-----------------------------------------------------------------------------------------
<S>              <C>              <C>              <C>                   <C>
 A-2             3.80%               $ 67,445        April 20, 2006        April 20, 2008
 A-3             4.55%                 31,000        April 20, 2007        April 20, 2009
 A-4             4.98%                 95,000        April 20, 2010        April 20, 2012
 A-5             5.43%                117,000        April 20, 2013        April 20, 2015
 A-6             5.76%                115,592      October 20, 2015      October 20, 2016
                                      -------

Total                                $426,037
Current Maturities                    (27,786)
                                     --------
Long-Term Debt                       $398,251
                                     ========
</TABLE>

The amortization schedule for the securitization bonds provided for an initial
payment to bondholders on July 20, 2002 and then quarterly thereafter. The
following table provides the expected principal retirement of the securitization
bonds during the next five calendar years, and thereafter (in thousands).

<TABLE>
<CAPTION>
                Principal
   Year         Retirement
   ----         ----------
<S>             <C>
   2004            27,786
   2005            28,646
   2006            29,591
   2007            30,763
   2008            32,130

Thereafter        277,121
                 --------
Total Debt       $426,037
</TABLE>

As scheduled, on January 20, 2004, $6.9 million of securitization bonds were
retired.

11

<PAGE>

4. FAIR VALUE OF FINANCIAL INSTRUMENTS

Restricted cash is on deposit with the trustee and, by definition, is carried at
its fair value. At December 31, 2003, and 2002, Consumers Funding had a
financial asset (representing its securitization receivable from Consumers) of
approximately $416 million and $443 million, respectively, and financial
liabilities (representing the securitization bonds) with a cost basis of
approximately $426 million and $453 million respectively. The securitization
receivable and securitization bonds are carried at cost, which approximates fair
value. Fair value is estimated based on quoted market prices, or, in the absence
of specific market prices, on quoted market prices of similar investments or
other valuation techniques.

5. SIGNIFICANT AGREEMENTS AND RELATED PARTY TRANSACTIONS

Consumers Funding's securitization receivable with Consumers totaled
approximately $416 million, $443 million, and $469 million as of December 31,
2003, 2002, and 2001, respectively. Accordingly, Consumers Funding recognized
interest income totaling $22 million, $23 million, and $3.4 million for the
years ended December 31, 2003, 2002, and 2001, respectively. In addition,
Consumers Funding recognized other operating revenue from Consumers totaling
approximately $1.2 million, $1.4 million, and $0.1 million for the years ended
December 31, 2003 and for the comparable periods in 2002 and 2001.

Under the servicing and administration agreements, Consumers is required to
manage and administer the securitization property of Consumers Funding, and to
collect the Securitization Charge on Consumers Funding's behalf. Consumers
Funding pays Consumers a servicing fee (see Note 1) and an annual administrative
fee. These fees are payable to Consumers on each scheduled quarterly payment
date beginning July 20, 2002. For the years ended December 31, 2003, 2002, and
2001, Consumers Funding has recorded total expenses related to these fees of
approximately $1.2 million, $1.4 million, and $0.1 million.

12

<PAGE>
                         REPORT OF INDEPENDENT AUDITORS


To Consumers Funding LLC:

We have audited the accompanying balance sheets of Consumers Funding LLC as of
December 31, 2003 and 2002, and the related statements of income, member's
equity, and cash flows for the years then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits. The financial
statements of Consumers Funding LLC as of December 31, 2001, were audited by
other auditors (who have ceased operations) whose report dated March 14, 2002,
expressed an unqualified opinion on those statements.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Consumers Funding LLC at
December 31, 2003 and 2002, and the results of its operations and its cash flows
for the years then ended, in conformity with accounting principles generally
accepted in the United States.


                                                       /s/ Ernst & Young LLP


Detroit, Michigan
February 27, 2004


13
<PAGE>
 THIS REPORT IS A COPY OF THE PREVIOUSLY ISSUED ARTHUR ANDERSEN REPORT AND THIS
                          REPORT HAS NOT BEEN REISSUED
                             BY ARTHUR ANDERSEN LLP


The Arthur Andersen LLP report below is only included for the year ended
December 31, 2001.

                       Report of Independent Accountants

We have audited the accompanying balance sheet of CONSUMERS FUNDING LLC (a
Delaware limited liability corporation and wholly owned subsidiary of Consumers
Energy) as of December 31, 2001, and the related statements of income, cash
flows, and member's equity for the year ended December 31, 2001. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on the financial statements based on
our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Consumers Funding as
of December 31, 2001, and the results of its operations and its cash flows for
the years ended December 31, 2001, in conformity with accounting principles
generally accepted in the United States.


/s/ Arthur Andersen LLP


Detroit, Michigan,
March 14, 2002.


14

<PAGE>

                              CONSUMERS FUNDING LLC

PART II OTHER INFORMATION

         ITEM 1.  LEGAL PROCEEDINGS

               None.

         ITEM 5.  OTHER INFORMATION

               None.

         ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

                  (a)     Exhibits.

                          See Exhibit Index that appears following the Signature
                          page to this report.

                  (b)     Reports on Form 8-K:

                          None

         ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
                   MARKET RISK

                 Not applicable.

15

<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
         the Registrant has duly caused this report to be signed on its behalf
         by the undersigned, thereunto duly authorized.

         CONSUMERS FUNDING LLC

         By: /s/ Laura L. Mountcastle                       Date: March 10, 2004
             ------------------------
         Laura L. Mountcastle
         President, Chief Executive Officer,
         Chief Financial Officer and Treasurer

         By: /s/ Glenn P. Barba                             Date: March 10, 2004
             ------------------
         Glenn P. Barba
         Chief Accounting Officer and Controller

16

<PAGE>

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
  NO.                           DESCRIPTION
-------                         -----------
<S>              <C>
10(a)            Monthly Servicer's Certificate dated November 18, 2003

10(b)            Monthly Servicer's Certificate dated December 19, 2003

10(c)            Monthly Servicer's Certificate dated January 16, 2004

10(d)            Quarterly Servicer's Certificate dated January 15, 2004

31               Consumers Funding LLC's certification pursuant to Section 302
                 of the Sarbanes-Oxley Act of 2002

32               Consumers Funding LLC's certification pursuant to Section 906
                 of the Sarbanes-Oxley Act of 2002
</TABLE>

17