##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2005
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from _______ to _______
 Commission file number (Under the Securities Act of 1933) 33-37977
 MIDLAND COGENERATION VENTURE LIMITED PARTNERSHIP
 
  MICHIGAN
    
    38-2726166(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)100 PROGRESS PLACE, MIDLAND, MICHIGAN
    
    48640(Address of principal executive offices)
    
    (Zip Code)Registrants telephone number, including area code
    
    (989) 839-6000
   o þ
 o þ
 þ o
 þ
 o o þ
 o þ




---



##### Table of Contents



PagePART IItem 1.
    
    Business
    
    
    1a.General
    
    
    1b.The Facility
    
    
    1c.Contracts
    
    
    2d.Employees
    
    
    8e.Regulation
    
    
    9f.Environmental Matters
    
    
    12g.Overall Lease Transaction
    
    
    13h.Forward-Looking Statements and Information
    
    
    16Item 1A.
    
    Risk Factors
    
    
    16Item 1B.
    
    Unresolved Staff Comments
    
    
    17Item 2.
    
    Properties
    
    
    17Item 3.
    
    Legal Proceedings
    
    
    18Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    19PART IIItem 5.
    
    Market for Registrant's Common Equity and Related Stockholder Matters
    
    
    20Item 6.
    
    Selected Financial Data
    
    
    20Item 7.
    
    Managements
Discussion and Analysis of Financial Condition and Results of Operations (MD&A)
    
    
    21Item 7A.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    29Item 8.
    
    Financial Statements and Supplementary Data
    
    
    30Item 9.
    
    Changes in and
Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    30Item 9A.
    
    Controls and Procedures
    
    
    30Item 9B.
    
    Other Information
    
    
    31PART IIIItem 10.
    
    Directors and Executive Officers of the Registrant
    
    
    32Item 11.
    
    Executive Compensation
    
    
    35Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management
    
    
    37Item 13.
    
    Certain Relationships and Related Transactions
    
    
    37Item 14.
    
    Principal Accountant Fees and Services
    
    
    38PART IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    
    39Signatures
    
    
    
    
    F-27Exhibit Index
    
    
    
    
    E-1Certifications302 Certification of President and Chief Executive Officer302 Certification of Chief Financial Officer, VP and Controller906 Certification of President and Chief Executive Officer906 Certification of Chief Financial Officer, VP and Controller




---



##### Table of Contents



Item 1. BUSINESS
 
 a.
    
    GeneralIn January 1987, Midland Cogeneration Venture Limited Partnership (MCV) was formed as a
limited partnership to convert a portion of an uncompleted Consumers Energy Company
(Consumers) nuclear power plant into a natural gas-fired, combined-cycle, cogeneration
facility located in Midland County, Michigan (the Facility). The Facility commenced
commercial operation in 1990 (the Commercial Operation Date) and is capable of generating
approximately 1500 megawatts (MW) of electricity and approximately 1.5 million pounds of
process steam per hour. The Facility is dependent upon natural gas for its fuel supply.The Facility is a cogeneration facility, meaning that it sequentially produces electricity and
useful thermal energy (steam) through an integrated system using a single fuel source. The
Facility has been certified by the Federal Energy Regulatory Commission (FERC) as a
qualifying cogeneration facility (QF) under the Public Utility Regulatory Policies Act of
1978, as amended (PURPA). As a QF, the Facility is exempt from various provisions of the
Federal Power Act, as amended (the FPA), the Public Utility Holding Company Act of 1935, as
amended (the 1935 Act), certain state laws regarding rate, financial and organizational
regulation, and is entitled to continue to sell electric capacity and related energy to
Consumers at Consumers incremental cost of alternative electric energy, otherwise known as
avoided cost.
 
 b.
    
    The FacilityMCVs principal business is the operation of the Facility and the sale of electric capacity
and related energy (principally to Consumers), electricity and steam to The Dow Chemical
Company (Dow) and steam to Dow Corning Corporation (DCC) produced at the Facility. The
Facility is located on an approximately 1200-acre site that is leased from Consumers (the
Site).The Facility consists of the following:
 
    
    12 gas turbine generators (GTGs);
    
    12 heat recovery steam generators (HRSGs) which create steam using heat
from the GTG exhaust;
    
    A steam turbine (the Unit 1 Steam Turbine) capable of producing electricity
from steam generated by the HRSGs;
    
    A second steam turbine (the Unit 2 Steam Turbine) which serves as a backup
to the Unit 1 Steam Turbine;
    
    A back-pressure steam turbine;
    
    Pollution control assets;
    
    A 25-mile gas pipeline connecting interstate and intrastate gas pipeline systems to the Facility;
    
    Pipelines to deliver steam to Dow and DCC; and
    
    Various associated equipment and improvements.
 Electricity is produced by the 12 GTGs, and the steam is produced by the 12 HRSGs using the
heat from the GTG exhaust. The Unit 1 Steam Turbine is designed to produce electricity using
the steam generated by the HRSGs and process steam that is provided to Dow and DCC. MCV
purchases demineralized water from Dow.
 -1-




---



##### Table of Contents



Electricity is sold by MCV to Consumers and other parties through an interconnect and to Dow
through dedicated transmission lines.
 
 c.
    
    ContractsMCVs material contracts are the PPA, which provides for the sale to Consumers of electric
capacity and related energy; the Resource Conservation Agreement with Consumers (RCA) and
related Reduced Dispatch Agreement (RDA), which together provide, among other things, for
the economic dispatch of the Facility; the Steam and Electric Purchase Agreement with Dow
(SEPA), which provides for the sale of steam and electricity to Dow; the Steam Purchase
Agreement with DCC (SPA), which provides for the sale of steam to DCC; gas supply, storage
and transportation contracts with a number of companies; an agreement covering gas turbine
inspection services and spare parts with General Electric International, Inc. (GEII); and an
agreement covering steam turbine inspection services and parts with General Electric Company
(GE). MCVs interests in the PPA and SEPA contracts, have been assigned to the Owner
Trustees, which in turn subassigned such contracts to MCV and granted a security interest in
such contracts to the Note Trustees. See Item 1, Section g, Overall Lease Transaction. The
following is intended to summarize briefly certain provisions of such contracts and is
qualified in its entirety by reference thereto.Power Purchase AgreementUnder the PPA, Consumers contracted to purchase 1240 MW/hour of the Facilitys electric
capacity (the Contract Capacity) until March 15, 2025 and thereafter subject to yearly
extensions that are automatic in the absence of a termination notice from either party. In
allocating the available electrical output of the Facility, MCV must first satisfy Dows
requirements under the SEPA before supplying power to Consumers under the PPA.Consumers has the right of first refusal to purchase any available electric capacity and
related energy produced by the Facility in excess of Contract Capacity if MCV is willing to
sell the same for a period of six months or longer. MCV is entitled to sell excess electric
capacity and related energy to other electric utilities or third parties, and Consumers is
required, if requested by such utilities or MCV, to transmit electrical energy for them
subject to certain conditions.Capacity charges are payable for available Contract Capacity, whether or not electricity is
dispatched. The capacity charges for on-peak and off-peak power average 4.15 cents per
available kilowatt hour (kWh); however, until September 15, 2007, the capacity charge may be
reduced by Consumers to a level of no less than an average of 3.77 cents per kWh.Energy charges are based on costs incurred by Consumers at certain of its coal-fired plants
(i.e., those coal plants wholly or partially owned by Consumers having a net demonstrated
capacity of at least 100 MW, available for generating electrical energy for not less than 5500
hours during the most recent year and having a capacity factor of at least 40% when connected
to Consumers system and generating electrical energy).
 Fixed Energy Charges
 Variable Energy Charges
 -2-




---



##### Table of Contents



The PPA permits Consumers, under certain conditions, to reduce the capacity and energy charges
payable to MCV and/or to receive refunds of capacity and energy charges paid to MCV if the
MPSC does not permit Consumers to recover from its customers the capacity and energy charges
specified in the PPA (the regulatory-out provision). Until September 15, 2007, however, the
capacity charge may not be reduced below an average capacity rate of 3.77 cents per kWh for
the available Contract Capacity notwithstanding the regulatory-out provision. Consumers and
MCV are required to support and defend the terms of the PPA. See Item 1, Section e,
Regulation  MPSC and Other Proceedings Relating to Capacity and Energy Charges.Under the PPA, if requested by Consumers, MCV must provide assurances that it has adequate gas
supplies under contract to generate at least 60% of the maximum annual output of Contract
Capacity for each succeeding five-year period. MCV believes it has adequate gas supplies
under contract to satisfy its current PPA fuel assurance requirements. If MCV is unable to
provide these continuing assurances, Consumers is entitled to withhold in a separate escrow
fund a portion of capacity charges until these assurances are provided.The PPA does not make any provision for the use of escrowed funds, except that the PPA
provides that interest earned, if any, on the escrowed funds is to be divided equally between
MCV and Consumers. After withholding capacity charges for 48 months without fuel assurances
being provided, Consumers may terminate the PPA. In the event of early termination of the
PPA, MCV would have a maximum liability of approximately $270 million if the PPA were
terminated in the 12th through 24th years.Consumers schedules all deliveries of electricity from the Facility to its system and is
obligated to do so in a manner consistent with the safe and prudent operation of the Facility.
As long as the annual availability of Contract Capacity equals or exceeds 75% of Contract
Capacity, Consumers must purchase sufficient electrical energy from the Facility to achieve at
least a 60% capacity factor on an annual basis. This purchase obligation decreases, based on
a prescribed formula, if annual availability falls below 75% of Contract Capacity. Annual PPA
availability has exceeded 98.5% since 1997.Consumers must purchase a specified minimum amount of electrical energy at all times, except
during emergencies on its system. MCV determines a minimum level of generation designed to
assure that the Facility operates in a stable manner and that MCV meets its obligations to
supply steam and electricity to Dow, but MCV cannot specify a minimum generating level which
exceeds 350 MW. Outages, other than forced outages, are to be scheduled to accommodate
Consumers requirements to the extent MCV deems practicable.MCV is obligated to have the Facility inspected at least once each year by a consulting
engineer selected by it from a list of engineering firms approved by Consumers. The annual
inspection includes, at a minimum, all equipment, structures, operating procedures and
maintenance practices necessary for the generation and delivery of energy to Consumers. Upon
completion of an annual inspection, the consulting engineer must promptly issue a written
report. Any recommendations in this report regarding equipment, structure and maintenance
practices, which have been approved by MCVs management, must be implemented within a
specified period of time. In its April 2005 report, Cummins & Barnard, Inc., the consulting
engineer, found no specific issues that MCV should take under advisement or act upon. With
regard to the most recent inspection, MCV expects to receive the report by the end of April
2006 and does not anticipate any substantial problems or requirements for plant modifications.In 1997, Consumers informed MCV of several potential payment issues it would pursue, pursuant
to the regulatory-out and other provisions of the PPA. MCV and Consumers entered into a
settlement agreement (Settlement Agreement), effective January 1, 1999, which resolves (for
the various time periods specified in the Settlement Agreement) all of the issues and includes
definitive obligations for Consumers to make energy payments calculated in accordance with the
PPA, irrespective of any MPSC or the reviewing courts decision
which may affect those issues or payments. The Settlement Agreement also provides that,
notwithstanding modifications to the Facility increasing its capacity, in billing Consumers for
capacity charges (at the rates set forth in the PPA) availability would be capped at 98.5% of
the 1240 MW (98.5% cap) on a calendar-year
 -3-




---



##### Table of Contents



basis for the term of the PPA regardless of any
MPSC or the reviewing courts decision, which may affect this issue or payment.
Notwithstanding the Settlement Agreement, after September 15, 2007, an issue could exist as to
whether or not Consumers can exercise the regulatory-out provision to reduce capacity
payments to MCV based upon the availability caps of 88.7% of the 1240 MW (both on and off
peak) of Contract Capacity as provided for in the 915 MW Settlement and the 325 MW Settlement.
See Item 1, Section e, Regulation  MPSC and Other Proceedings Relating to Capacity and
Energy Charges. The Settlement Agreement has not materially affected MCVs earnings and cash
flows.MCV currently delivers its electric power to purchasers through transmission lines owned and
operated by Michigan Electric Transmission Company, LLC, an enterprise of Trans-Elect, Inc.
(Trans-Elect). Such lines were previously owned by Consumers. MCV and Consumers previously
entered into the Facilities Agreement which provides for transmission service of excess
capacity and energy available at the Facility. The sale of the transmission facilities to
Trans-Elect does not change, in any respect, the contractual relationship and obligations of
Consumers under the Facilities Agreement. Trans-Elect is serving as Consumers agent to
perform Consumers obligations under the Facilities Agreement.The RCA and RDAIn 2004, MCV and Consumers entered into the RCA and RDA, which provide that Consumers will
economically dispatch MCV subject to availability of other generation resources, gas prices and
power market prices (Dispatch Mitigation). Such dispatch is expected to reduce electric
production from the Facility, as well as decrease gas consumption. The RCA provides that
Consumers has a right of first refusal to purchase, at market prices, the gas conserved under
the RCA. Savings realized by not having to generate electricity are first paid to Consumers
for the difference between MCV and replacement power costs, next funding $5 million annually
for renewable energy program(s) established for Consumers by the MPSC and the remaining savings
are split evenly by the parties. The RCA/RDA do not amend the PPA, but provide for
administration of certain features of the PPA including continuing assurances of gas supply
under contract and annual minimum deliveries. The economic dispatch under RCA/RDA is above
certain minimum dispatch levels (not to exceed 550 MW) specified by MCV. The RCA/RDA are for
the term of the PPA but both parties may terminate the RCA/RDA under certain conditions set
forth in those agreements. The RCA and RDA were approved by an order of the MPSC on January
25, 2005 and MCV and Consumers accepted the terms of the MPSC order making the RCA and RDA
effective as of January 27, 2005. This MPSC order has been appealed by other parties. MCV
management cannot predict the outcome of such appeal.Steam and Electric Power Agreement; Related Dow AgreementsSEPA. Pursuant to the SEPA, Dow has agreed to purchase steam from the Facility for an initial
term of 25 years from the Commercial Operation Date and to purchase electricity from the
Facility for 15 years (any electricity to be purchased thereafter at Dows option, although MCV
remains obligated to make certain amounts of electricity available for an additional 10 years).
In 2004, Dow notified MCV that it was extending its option to take electricity through 2008.
The SEPA is subject to automatic extensions for up to 10 additional years after its 25-year
term in the absence of a three-year notice of termination from either party.In any year, MCV is not obligated to deliver more than 691,900 pounds of steam per hour and 60
MW of electricity on an annual average basis except as Dow may increase its entitlement as
discussed below. Dow has agreed to take, at a minimum, as much steam as is necessary for the
Facility to retain its QF status under the FERC regulations in effect on November 1, 1986
(which regulations have not been revised in relevant part in any material respect). However,
Dows obligation with respect to minimum annual steam purchases is subject to reduction for
certain amounts supplied by the Standby Facilities (defined below) owned by Dow and less 50%
of amounts purchased by any other steam customers of MCV under contract of at least one year
and is binding only for the initial 25-year term of the SEPA.Dow may increase its steam or electricity entitlement to 110% of the steam or electricity
delivered in the previous 12-month period, plus any steam or electricity required by any
addition to or modification of the Dow plant, provided that any increase above an annual
average of 1,000,000 pounds of steam per hour or 75 MW of
 -4-




---



##### Table of Contents



electricity requires MCVs consent.
MCV, however, may be required, on an instantaneous basis, to deliver steam at a rate of up to
135% of the maximum annual average hourly quantity of steam or to deliver power at a rate up
to 20 MW greater than the applicable annual average. In 1997, Dow increased its electric
entitlement to 67.75 MW/hr; no such increase has since been requested.Under the SEPA, there is a base charge for steam and electricity which is subject to
adjustment each quarter based on changes in MCVs fuel costs, producer price for capital
equipment and certain compensation per hour indices. Dow also has the option under the SEPA
and subsequent amendments, to provide the gas necessary to generate Dows take of steam and
electricity (toll). Under the provisions of the SEPA, Dow receives a billing credit of 5/8
of its steam and electric charges in exchange for Dow purchasing the natural gas for MCV.In order to assure reliable steam for the Dow plant, Dow owns and maintains standby
facilities, which are not part of the Facility (the Standby Facilities). MCV pays Dow
$350,000 per year to maintain these Standby Facilities. This fee is subject to the same
indexing adjustments each quarter as the base steam charge. In addition, the fee charged by
Dow for each use of the Standby Facilities, necessitated when MCV fails to deliver steam under
the SEPA is $150,000.The terms of the SEPA provide that Dow may terminate the SEPA if one or more contract
outages occur for a cumulative period greater than 24 hours in any year, provided that a
single outage of more than 24 consecutive hours but less than 72 consecutive hours will not
give rise to a right of termination unless another such contract outage has occurred within
the previous 60 months.A contract outage generally occurs when MCV fails to deliver minimum operation steam (i.e.,
an hourly flow rate of at least 75% of the then current rate), or fails to meet pressure
specifications after having failed to deliver steam for 15 consecutive minutes, or fails to
meet pressure and quantity specifications after having failed to deliver steam for seven
consecutive days, except in each case as a result of scheduled maintenance outages, outages
forced at Dows request or resulting from Dows failure to provide demineralized water or
waste water treatment services or outages caused by an event of force majeurelasting no more
than two years. Steam provided to Dow from the Standby Facilities is treated as steam
delivered by MCV for this purpose. For such a contract outage to occur, more than ten of the
Facilitys GTGs would have to be out of service at the same time that Dows Standby Facilities
are unavailable.The SEPA and various backup agreements among MCV, Consumers and Dow contain various provisions
designed to assure a continuous supply of steam and electricity to Dow in the event the SEPA
is terminated.Dow Facilities and Demineralized Water. Dow owns the electrical transmission lines, which
carry electricity from the Facility to the Dow plant. Dow also owns certain steam and
demineralized water lines which are used in the operation of the Facility, and which have been
leased by Dow to MCV. Dow has contracted to provide MCV sufficient demineralized water to
meet the Facilitys requirements until 30 months after MCVs obligation to supply steam to Dow
ceases.Steam Purchase AgreementIn 1995, MCV entered into the SPA with DCC which provides that MCV construct, own and operate
a steam line and appurtenant equipment to serve steam to DCCs Midland plant. DCC has agreed
to purchase steam from MCV for an initial term of fifteen years with automatic year-to-year
renewals thereafter. The steam MCV provides DCC must meet operational and content
specifications. The provision of steam to DCC is subject to Dows first preference to the
steam under the SEPA. MCV began supplying steam to DCC in July 1996. The parties have
certain termination rights after the declared in service date but may be subject to penalties
or damages for such termination.In September 2005, MCV gave notice to DCC of its intent to terminate the SPA effective
September 19, 2006, as provided for in the SPA. MCV informed DCC that it is willing to
consider entering into another agreement with DCC at market-based pricing of steam. MCV has
not been able to reach a new agreement with DCC at market-based pricing. The termination of
the SPA is conditioned upon MCV making a payment to DCC
 -5-




---



##### Table of Contents



30 days prior to the effective date of
the termination. This termination payment, which has been accrued, is for a certain portion
of future revenues, which payment is estimated to be $5.1 million. The contract termination
is not expected to have any negative impact on MCVs PURPA QF certification (i.e., MCVs
operating and efficiency requirements under PURPA will be met without steam sales to DCC).Gas Supply ArrangementsThe Facility is wholly dependent upon natural gas for its fuel supply and a substantial
portion of the Facilitys operating expenses consist of the costs of natural gas. MCV
recognizes that its existing gas contracts are not sufficient to satisfy the anticipated gas
needs over the term of the PPA, and, as such, no assurance can be given as to the availability
or price of natural gas after the expiration of the existing gas contracts.MCV has a portfolio of long-term natural gas purchase contracts (contracts that provide for
gas purchases for a term of greater than one year), having remaining terms of 1 to 8 years,
with U.S. and Canadian suppliers for an annual average maximum supply of natural gas for 2006
of 238,665 million British thermal units (MMBtu)/day. As of January 1, 2006, no single gas
contract accounts for more than 21.3% of MCVs portfolio, though, El Paso Corporation (El
Paso) and its subsidiaries account for 40.8% of MCVs portfolio. Gas contracts with U.S.
suppliers provide for a 2006 annual average purchase of 176,010 MMBtu/day, while gas contracts
with Canadian suppliers provide for the purchase of 62,655 MMBtu/day. In addition to
purchasing natural gas under long-term contracts, MCV also purchases gas under short term
(spot) agreements for a term of less than one year. During 2005, MCVs gas purchases were
supplied 89% from long-term gas contracts and 11% from spot gas contracts.
 
 Year
    
    Fixed Price
    
    
    Indexed Price
    
    
    Floating Price
    
    
    Total2006
    
    
    74,164
    
    
    
    59,156
    
    
    
    105,345
    
    
    
    238,6652007
    
    
    54,329
    
    
    
    16,000
    
    
    
    156,367
    
    
    
    226,6962008
    
    
    46,000
    
    
    
    7,500
    
    
    
    137,000
    
    
    
    190,5002009
    
    
    36,000
    
    
    
    7,500
    
    
    
    135,329
    
    
    
    178,8292010
    
    
    36,000
    
    
    
    7,500
    
    
    
    109,151
    
    
    
    152,6512011
    
    
    36,000
    
    
    
    4,863
    
    
    
    62,000
    
    
    
    102,8632012
    
    
    32,667
    
    
    
    2,667
    
    
    
    43,500
    
    
    
    78,8342013
    
    
    
    
    
    
    
    
    
    
    3,395
    
    
    
    3,395
  Fixed Price
    
    Individual contracts utilize either a fixed price through life of contract or a
fixed price with fixed escalator.Indexed Price
    
    Individual contracts utilize either a fixed price with an escalator tied to the
energy index based on Consumers charges under the PPA or an amount based on a combination of
a fixed with escalator and fixed with energy escalator.Floating Price
Mercantile
    
    A price tied to (1) the Henry Hub gas contract on the New York
Exchange for the month gas is purchased or (2) the Alberta, Canada price as published in the
Canadian Gas Price Reporter.
 -6-




---



##### Table of Contents



Credit Support Requirements for MCVs Gas Arrangements. MCV is exposed to the risk of loss
from failure of its counterparties, under its natural gas supply and derivative contracts, to
comply with the terms of the respective contracts, which includes non-delivery under the
natural gas supply contracts. To protect against this loss, many of MCVs gas supply
contracts have credit support requirements that can be triggered by changes in the financial
condition of MCV or the gas supplier, price changes in the forward gas market or the quantity
of gas purchases. MCV management monitors this risk through the periodic review of the credit
and financial condition of these counterparties and as of December 31, 2005, believes the risk
of noncompliance to be remote. If any of these counterparties failed to deliver on their
requirements, MCV does not expect that this would have a material impact on its financial
condition or cash flows. As of December 31, 2005, MCV is supplying credit support to gas
suppliers in the form of a letter of credit in the amount of $2.4 million; and cash on deposit
in the amount of $16.5 million. As of December 31, 2005, MCV was holding letters of credit
totaling $407.4 million from gas suppliers as collateral support for specific MCV long-term
gas agreements of which $385.7 million is a letter of credit from El Paso, a related party.
In addition, as of December 31, 2005, MCV is holding $193.0 million of cash on deposit from
MCVs brokers and gas suppliers, of which $44.4 million is cash on deposit from El Paso.A number of MCVs gas supply agreements have parent guarantees that are supplied by the
corporate parents of the entity that is a party to the MCV gas contract. The MCV Partners
guarantee none of MCVs gas supply agreements.MCV hedges gas with NYMEX contracts that have both initial and variation margin requirements.
As of December 31, 2005, MCV held 1,929 NYMEX contracts and had margin requirements of $22.5
million to support the acquisition of the aforementioned NYMEX contracts. These requirements
were supported by the unrealized gains on the open positions.MCV also hedges gas with NYMEX commodity swaps, as of December 31, 2005, MCV had positions
totaling 30.9 bcf in place. These contracts have credit support requirements that can be
triggered by changes in the financial condition of MCV or the counterparty and price changes
in the forward gas market. As of December 31, 2005, MCV had credit requirements of $15.7
million to support the acquisition of the aforementioned swap arrangements. These
requirements were supported by the unrealized gains on the open positions.In addition, MCV also has credit support requirements in connection with its gas
transportation contracts. The present tariff provisions in MCVs gas transportation contracts
provide that credit support can be required based on the credit worthiness of the holder of
the contract. As of December 31, 2005, MCV had not been required to provide any credit
support for its gas transportation contracts.Gas Transportation and Storage ArrangementsThe location of the Facility permits gas to be transported over a number of U.S. interstate
pipelines. MCV has signed long-term transportation contracts with four of these pipelines:
ANR Pipeline Company (ANR); Panhandle Eastern Pipe Line Company (Panhandle); Trunkline Gas
Company (Trunkline); and Great Lakes Gas Transmission Company (Great Lakes). ANR and
Great Lakes are affiliates of El Paso. In addition, certain of the gas suppliers arrange with
pipelines for the gathering and transportation of gas from their supply sources to the
interconnection points with the major interstate pipelines with which MCV has contracts.MCV has a long-term transportation arrangement with Consumers connecting pipelines which link
the Facility and its own pipeline to Consumers interstate pipelines. Michigan gas produced
by suppliers is currently transported to Consumers pipeline system by the supplier under
contracts the suppliers have with MichCon Gathering Company (previously Michigan Consolidated
Gas Company) (MichCon), on the MichCon pipeline system in northern Michigan.
 -7-




---



##### Table of Contents



The remaining terms of MCVs agreements with the U.S. transporters range from less than 1 to
20 years. The transportation rates of ANR, Panhandle, Trunkline and Great Lakes are subject
to FERC regulation.The suppliers under the Canadian long-term gas contracts are themselves responsible for
arranging transportation within Canada, and are responsible for paying the transportation
rates charged by the Canadian transporters, which are then, in most cases, reimbursed by MCV.
All suppliers have been allocated firm transportation capacity on the relevant pipelines.
Great Lakes transports Canadian gas from the U.S.-Canada border to Michigan.MCV has also entered into a gas storage agreement with Consumers for the underground storage
of eight billion cubic feet of gas in exchange for delivery to Consumers of 1.75% of the gas
placed in storage (for fuel) and the payment by MCV to Consumers of an annual storage service
charge of 32.04 cents per MMBtu times the eight billion cubic feet of storage service
provided. Consumers is obligated to provide deliveries from storage up to a rate of 120,000
MMBtu/day, subject to certain restrictions relating to levels of storage gas maintained in
inventory by MCV. This storage capability allows MCV to meet fluctuating daily operating
requirements and to take advantage of opportunities to make spot purchases during periods of
the year when gas prices are favorable.Gas Turbine Service AgreementsMCV has a maintenance service and parts agreement with GEII, which commenced July 1, 2004
(GEII Agreement). GEII is providing maintenance services and hot gas path parts for MCVs
twelve GTGs including an initial set of spare parts, providing qualified service personnel and
supporting staff to assist MCV to perform scheduled inspections on the GTGs and to repair the
GTGs at MCVs request. The GEII Agreement covers four rounds of major GTG inspections, which
are expected to be completed by 2015. MCV is to make monthly payments over the life of the
contract totaling approximately $207 million (subject to escalations based on defined
indices). The GEII Agreement can be terminated by either party for cause or convenience.
Should termination for convenience occur, a buy out amount will be paid by the terminating
party with payments ranging from approximately $19.0 million to $.9 million, based upon the
number of operating hours utilized since commencement of the GEII Agreement.Steam Turbine Service AgreementMCV entered into a nine year Steam Turbine Maintenance Agreement with GE effective January 1,
1995, which is designed to improve unit reliability, increase availability and minimize
unanticipated maintenance costs. Effective February 1, 2004, MCV and GE amended this contract
to extend its term through August 31, 2007. MCV is to make monthly payments over the life of
the contract totaling $22.3 million (subject to escalation based on defined indices). The
parties have certain termination rights without incurring penalties or damages for such
termination. Upon termination, MCV is only liable for payment of services rendered or parts
provided prior to termination.
 
 d.
    
    EmployeesAs of February 1, 2006, MCV had 111 employees. Fifty-three of MCVs employees are members of
the Utility Workers Union of America, AFL-CIO Local 564 (the Union), and are subject to the
terms of a collective bargaining agreement between MCV and the Union. MCV and the Union
signed a five-year agreement effective March 1, 2004, with a wage reopener in each of the last
two years. MCV believes that its relationship with its employees is good.
 -8-




---



##### Table of Contents



e.
    
    Regulation
 IntroductionMCV and the Facility are not subject to most state and federal public utility laws and
regulations. The following is a discussion of the principal regulatory proceedings and issues
which could have an impact on MCV and/or the Facility.QF CertificationIn order to maintain QF status under PURPA, after passage of the Energy Policy Act of 2005,
certain operating and efficiency standards must be maintained on a calendar-year basis. In
the case of a topping-cycle generating plant such as the Facility, the applicable operating
standard requires that the portion of total energy output that is put to some useful purpose
other than facilitating the production of power (the Thermal Percentage) be at least 5%. In
addition, the plant must achieve and maintain an average PURPA efficiency standard (the sum of
the useful power output plus one-half of the useful thermal energy output, divided by the
energy input) of at least 45% (the Efficiency Percentage). However, if the plant maintains
a Thermal Percentage of 15% or higher, the required Efficiency Percentage is reduced to 42.5%.
Since 1990, the required Thermal and Efficiency Percentages have been achieved. During 2005,
a Thermal Percentage of 23.7% and an Efficiency Percentage of 47.2% were achieved.The Facilitys QF certification by FERC became effective when portions of the Facility were
first synchronized to Consumers system in June 1989. As the operator of a QF, MCV (and the
Facility) are exempt from various provisions of the FPA and the 1935 Act and from certain
state laws and regulations respecting rate, financial and organizational regulation of public
utilities. On January 31 and March 1, 1990, FERC recertified the Facility as a QF in the
context of an ownership structure in which MCV owns the Facility and in the context of a
leveraged lease transaction in which the Facility is owned by Owner Trustees on behalf of
institutional investors and operated by MCV. In prior years and most recently in 2006, MCV
filed Notices of Self-Recertification with the FERC to reflect changes in the configuration
and equipment of the Facility, changes in MCV Partnership ownership and changes in the
beneficial owner of certain of the Owner Trusts.MPSC and Other Proceedings Relating to Capacity and Energy ChargesBackground. The PPA contains a regulatory-out provision which permits Consumers,
under certain conditions, to reduce the capacity and/or energy charges payable to MCV and/or
to receive refunds of capacity and/or energy charges paid to MCV under the PPA if the MPSC
does not permit Consumers to recover from its customers the capacity and energy charges
specified in the PPA. Until September 15, 2007, however, the PPA further provides that
Consumers may not reduce the average capacity charge below 3.77 cents per kWh notwithstanding
the MPSCs failure to approve either the amount of capacity Consumers has agreed to purchase
from MCV under the PPA or the capacity charge specified in the PPA for such purchase.Energy charges payable by Consumers under the PPA are separate and distinct from the capacity
charge in that no 17-1/2 year protection against the exercise of the regulatory-out
provision for energy charges is provided for in the PPA. Although prior approval of energy
charges is not required or provided for under Michigan law, the MPSC has asserted the
authority to disallow Consumers recovery of a portion of such energy charges paid to MCV.
Any disallowance by the MPSC of Consumers ability to recover energy charges from its
customers could, pursuant to the regulatory-out provision of the PPA, result in a reduction
or refund of the fixed and variable portions of the energy charge under the PPA.MPSC and Other Proceedings. In September 1987, in order to obtain a 17-1/2 year rate
protection provided under Michigan law, known as Act 81, MCV requested MPSC approval of the
capacity rate provided for in the PPA. During the pendency of this matter, Consumers, MPSC
staff and others negotiated a revised settlement proposal, which was submitted to the MPSC for
approval (Revised Settlement Proposal).
 -9-




---



##### Table of Contents



In a 1993 order (the 915 MW Settlement), the MPSC approved with modifications the Revised
Settlement Proposal. Generally, the 915 MW Settlement approved cost recovery of Consumers
from its rate payers of 915 MW of MCV capacity subject to certain availability caps
associated with on-peak and off-peak periods of time each day (beginning on January 1, 1998,
the availability caps were 88.7% of 915 MW both on and off peak) and recovery of energy
payments based on coal proxy prices (the formula in the PPA). However, instead of capacity
and fixed energy payments being based on availability as provided in the PPA, the 915 MW
Settlement provided for recovery of such payments on an energy delivered basis. The MPSC
did not order that the PPA be modified to conform with the cost recovery approved in the 915
MW Settlement. However, the MPSC found that since the capacity charges approved for recovery
under the Revised Settlement Proposal would not be reflected in the PPA, approval for the
purposes of Act 81 could not be extended to those capacity charges. The MPSC did indicate in
its order, however, that its 915 MW Settlement would be implemented for rate-making purposes
in 1993 and subsequent years. Opponents to the Revised Settlement Proposal unsuccessfully
filed appeals of the 915 MW Settlement which is now final.In connection with a dispute between MCV and Consumers regarding the payment of certain fixed
energy charges which stemmed from the Revised Settlement Proposal, on December 10, 1993,
Consumers made a written irrevocable offer of relief (Offer of Relief) to MCV. The Offer of
Relief was for the purpose of facilitating the sale of Senior Secured Lease Obligation Bonds,
issued in connection with the financing of the Overall Lease Transaction (See Item 1, Section
g, Overall Lease Transaction) and held by Consumers. Pursuant to the Offer of Relief, which
was rendered final and irrevocable on December 28, 1993, Consumers committed to pay MCV the
fixed energy charges on all energy delivered by MCV from the block of Contract Capacity above
915 MW. Consumers did not commit to pay MCV for fixed energy charges on energy delivered
above the caps established in the 915 MW Settlement up to 915 MW. This unilateral
commitment, which became effective as of January 1, 1993, to pay fixed energy charges on
delivered energy from the block of Contract Capacity above 915 MW will expire on September 15,
2007.In 1993, Consumers exercised its rights under the PPA to obtain a determination through
arbitration proceedings of whether Consumers could exercise the regulatory-out provision of
the PPA in view of Consumers acceptance of the 915 MW Settlement. In a Final Order issued in
1995, the arbitrator ruled that Consumers may withhold the fixed energy charges for available
but undelivered energy, as well as for energy delivered between the caps contained in the
915 MW Settlement and 915 MW.In 1995, Consumers and the MPSC staff asked the MPSC to approve a settlement agreement (325
MW Settlement) which proposed recovery by Consumers from its ratepayers of an additional 325
MW of capacity purchased from MCV beginning January 1, 1996 through the term of the PPA. The
costs recovered for this 325 MW of MCV Contract Capacity was essentially the same as the 915
MW Settlement already approved by the MPSC after a phase in of the capacity rate between 1996
and 2004 including the same availability caps as the 915 MW Settlement. On November 14,
1996, the MPSC approved, with modifications not material to MCV, the 325 MW Settlement
effective January 1, 1996 (325 MW Settlement).In 1999, MCV and Consumers entered into a settlement agreement (Settlement Agreement), which
resolves (for the various time periods specified in the Settlement Agreement) disputed issues
under the PPA and includes definitive obligations for Consumers to make energy payments
calculated in accordance with the PPA, irrespective of any MPSC or the reviewing courts
decision which may affect those issues or payments. The Settlement Agreement also provides
that, in billing Consumers for capacity charges (at the rates set forth in the PPA)
availability would be capped at 98.5% of the 1240 MW (98.5% cap) on a calendar-year basis
for the term of the PPA irrespective of any MPSC or the reviewing courts decision, which may
affect this issue or payment. Notwithstanding the Settlement Agreement, after September 15,
2007, an issue could exist as to whether or not Consumers can exercise the regulatory-out
provision to reduce capacity payments to MCV based upon the availability caps of 88.7% of
the 1240 MW (both on and off peak) of contract capacity as provided for in the 915 MW
Settlement and the 325 MW Settlement. The Settlement Agreement has not materially affected
MCVs earnings and cash flows.
 -10-




---



##### Table of Contents



Michigan Electric Industry Restructuring ProceedingsThe MPSC issued orders in 1997 and 1998 (collectively the Restructuring Orders). The
Restructuring Orders provide for a transition to a competitive regime whereby electric retail
customers would be able to choose their power supplier and pay negotiated or market-based rates
for such power supply. The Restructuring Orders also mandated that utilities wheel
third-party power to the utilities customers. An issue involved in restructuring, which could
significantly impact MCV, is stranded cost recovery. The Restructuring Orders allow recovery
by utilities (including Consumers) of net stranded costs, which include capacity charges from
QFs, including MCV, previously approved by the MPSC, incurred during the regulated era that
will be above market prices during the new competitive regime. However, it appears that
stranded cost recovery of above-market capacity charges in power purchase contracts (including
MCVs PPA) is limited to customers who chose an alternative power supplier and are only paid
for the period 1998 through 2007 (MCVs PPA expires in 2025). Customers who chose to remain
power supply customers of Consumers will continue to pay capacity charges as part of rates
charged by Consumers, subject to MPSC rate regulation. The Restructuring Orders do not
otherwise specifically address the recovery of PPA capacity charges after 2007. MCV, as well
as others, filed appeals in state and federal courts challenging the Restructuring Orders. The
Michigan Court of Appeals found that the Restructuring Orders do not unequivocally disallow
recovery of PPA charges (capacity and energy) by Consumers and, therefore, MCVs issues were
not ripe for appellate review and no actual controversy regarding recovery of costs could occur
until 2008, at the earliest. This order is now final.In June 2000, the State of Michigan enacted legislation which, among other things, states that
the Restructuring Orders (being voluntarily implemented by Consumers) are in compliance with
the legislation and enforceable by the MPSC. The legislation provides that the rights of
parties to existing contracts between utilities (like Consumers) and QFs (like MCV), including
the rights to have the PPA charges recovered from customers of the utilities, are not abrogated
or diminished, and permitted utilities to securitize certain stranded (transition) costs
including PPA charges.In MCVs federal court challenge to the Restructuring Orders, the U.S. District Court granted
summary judgment to MCV declaring, among other things, that the Restructuring Orders are
preempted by federal law to the extent they prohibit Consumers from recovering from its
customers any charge for avoided costs (or stranded costs) to be paid to MCV under PURPA
pursuant to the PPA. In June 2001, the United States Court of Appeals (Appellate Court)
vacated the U.S. District Courts summary judgment and ordered the case dismissed based upon a
finding that no actual case or controversy existed for adjudication between the parties. The
Appellate Court determined that the parties dispute is hypothetical at this point in time and
the QFs (including MCV) claims are premised on speculation about how an order might be
interpreted in the year 2007 or beyond by a future MPSC.Federal Electric Industry RestructuringFERC has jurisdiction over wholesale energy sales and is moving towards market based pricing
of electricity as opposed to traditional cost-based pricing. FERC also has jurisdiction over
the interstate transmission of electricity, including rates. In December 1999, FERC issued a
final rule, Order No. 2000, designed to encourage all owners and operators of interstate
electric transmission lines to join regional transmission organizations. In April 2005, the
Midwest Independent System Operator began operating the interstate electric transmission grid
into which MCVs electricity is dispatched. This change has not materially impacted MCVs
business. In addition, federal energy legislation is proposed from time to time with various
provisions which could impact MCV. FERC decisions and/or federal legislation could impact MCV
in selling and transmitting electricity in the wholesale market. MCV management cannot predict
the impact that FERC decisions or federal legislation may have on MCVs business, if any, at
this time.On August 8, 2005, the Energy Policy Act of 2005 (EPA of 2005) was enacted. The EPA of 2005
amended PURPA primarily with respect to new cogeneration facilities. However, certain of the
amendments affect existing QFs such as the elimination of the prohibition against an electric
utility owning more than a 50 percent interest in a QF. FERC has also stated in a Notice of
Proposed Rulemaking (NOPR) that it intends to eliminate at least some of the exemptions QFs
have from certain provisions of the Federal Power Act including
 -11-




---



##### Table of Contents



requiring existing QFs to obtain a FERC approved tariff to make market-rate sales to third
parties with whom the QF does not have a state-regulated power purchase agreement. MCV
management does not believe that the EPA of 2005 or the enactment of the changes proposed in
the NOPR will have a material impact on the business or financial condition and results of
operations of MCV.Other Regulatory IssuesMCV has been granted a permanent exemption from the Power Plant and Industrial Fuel Use Act of
1978, as amended, relating to the use of natural gas as its primary energy source. This
exemption permits MCV to consume gas without restriction as to hours of operation or the
capacity of the Facility to consume an alternate fuel.The Canadian long-term gas contracts require permits from both Canadian and U.S. authorities.
All of the suppliers have received approval from Canadian provincial authorities to lift and
remove sufficient gas volumes to meet MCVs current contract requirements and from the
National Energy Board (NEB) to export these volumes. The U.S. long-term gas contracts are
not subject to regulatory approvals.
 
 f.
    
    Environmental Matters
 MCV has obtained all material federal, state and local environmental permits necessary to
construct and operate the Facility. MCV believes that the Facility complies in all material
respects with all applicable federal, state and local environmental regulations and laws. It
is possible that applicable environmental laws and regulations may change, making compliance
more costly, time consuming and difficult. Any such changes, however, are likely to apply to
similarly situated power plants and not only to the Facility.On July 12, 2004, the Michigan Department of Environmental Quality (DEQ), Air Control
Division, issued MCV a Letter of Violation asserting that MCV violated its Air Use Permit to
Install No. 209-02 (PTI) by exceeding the carbon monoxide emission limit on the Unit 14 GTG
duct burner and failing to maintain certain records in the required format. MCV declared five
of the six duct burners as unavailable for operational use (which reduces the generation
capability of the Facility by approximately 100 MW) and took other corrective action to
address the DEQs assertions. The one available duct burner was tested in April 2005 and its
emissions met permitted levels due to the configuration of that particular unit. MCV
disagrees with certain of the DEQs assertions. MCV filed a response in July 2004 to address
the Letter of Violation. On December 13, 2004, the DEQ informed MCV that it was pursuing an
escalated enforcement action against MCV regarding the alleged violations of MCVs PTI. The
DEQ also stated that the alleged violations are deemed federally significant and, as such,
placed MCV on the United States Environmental Protection Agencys (US EPA) High Priority
Violators List (HPVL). The DEQ and MCV are pursuing voluntary settlement of this matter,
which will satisfy state and federal requirements and remove MCV from the HPVL. Any such
settlement may involve a fine, but the DEQ has not, at this time, stated what, if any, fine
they will seek to impose. MCV has accrued $50,000 for this issue. At this time, MCV
management cannot predict the financial impact or outcome of this issue.On July 13, 2004, the DEQ, Water Division, issued MCV a Notice Letter asserting MCV violated
its National Pollutant Discharge Elimination System Permit by discharging heated process waste
water into the storm water system, failing to document inspections, and other minor
infractions (alleged NPDES violations). In August 2004, MCV filed a response to the DEQ
letter covering the remediation for each of the DEQs alleged violations. On October 17, 2005,
the DEQ, Water Bureau, issued to MCV a Compliance Inspection report, which listed several
minor violations and concerns that needed to be addressed by MCV. This report was issued in
connection with an inspection of the Facility in September 2005, which was conducted for
compliance and review of the Storm Water Pollution Prevention Plans (SWPPP). MCV submitted
its updated SWPPP on December 1, 2005. MCV management believes it has resolved all issues
associated with the Notice Letter and Compliance Inspection and does not expect any further
DEQ actions on these matters.
 -12-




---



##### Table of Contents



Environmental Indemnity Agreements. CMS Energy Corporation (CMS Energy) has executed
environmental indemnity agreements in favor of the Senior Bond Trustee, the Subordinated Bond
Trustee, the Tax-Exempt Trustee (all as defined in Overall Lease Transaction), MCV and the
holders, from time to time, of the Bonds. Pursuant to these indemnity agreements, CMS Energy
has agreed to indemnify these parties and certain related parties against all expense, damage
and liability incurred by them, which is caused by certain classes of environmental matters to
the extent these occurred at the Site before June 15, 1990 (with certain exceptions). These
matters include (i) the presence of any environmentally hazardous materials at the Site, (ii)
any environmentally hazardous activity at the Site and (iii) any event which is a violation of
environmental laws affecting the Site (including amendments and supplements to such laws
whenever enacted except, in the case of such enactments after June 15, 1990, to the extent
they would require installation or modification of equipment). CMS Energy has entered into a
similar environmental indemnity agreement for the benefit of the Owner Trustee (in its
individual and trust capacities), the Owner Participants (as defined in Overall Lease
Transaction) and certain related parties. In the agreement in favor of MCV, payments by CMS
Energy are subject to a deductible of $20,000 per occurrence and $240,000 in the aggregate.
The agreement in favor of MCV terminates when all the Senior Bonds (as defined in Overall
Lease Transaction) have been paid in full and all the holders of the Bonds (as defined in
Overall Lease Transaction) have been paid all amounts owed under the general indemnity in
the Participation Agreements, except that such indemnity shall not terminate with respect to
certain rights arising prior to such final payment.MCV has also executed an environmental indemnification agreement in favor of CMS Energy under
which it has agreed to indemnify CMS Energy in connection with (i) any violation of the
environmental laws by MCV with respect to the Site after June 5, 1988, (ii) the release or
disposal of any hazardous materials at, on or to the Site after June 5, 1988 (unless caused by
CMS Energy or resulting from hazardous materials at or on the Site prior to June 5, 1988), and
(iii) any hazardous activities at the Site after June 5, 1988, provided that CMS Energy may
satisfy these obligations only from amounts that are otherwise available for distribution to
Partners under the Participation Agreements.
 
 g.
    
    Overall Lease Transaction
 GeneralPermanent financing for the Facility has been provided through five separate but
contemporaneous sale and leaseback transactions (the Overall Lease Transaction), pursuant to
which MCV sold undivided interests in all of the fixed assets comprising the Facility to the
Owner Trustee under five separate owner trusts (the Owner Trusts) established for the
benefit of certain institutional investors (Owner Participants). U.S. Bank National
Association serves as Owner Trustee under each of the Owner Trusts (in each such capacity, an
Owner Trustee and, collectively, the Owner Trustees). Each Owner Trustee leases its
undivided interest in the Facility to MCV under one of five separate leases, each having a
25-year base term (the Basic Lease Term) commencing in 1990.Each purchase of an undivided interest in the Facility by an Owner Trustee and the lease of
such undivided interest back to MCV constitutes a separate transaction (each, a Lease
Transaction). The undivided interests are in varying undivided interest percentages
ranging from approximately 4.4% to 75.5%. Each Lease Transaction was effected through
separate, but substantially identical, documents relating to a particular undivided interest,
including a Trust Agreement pursuant to which the Owner Participant established the Owner
Trust with the Owner Trustee and authorized the Owner Trustee to hold title to its undivided
interest on its behalf and lease the same to MCV (each a Trust Agreement), a Participation
Agreement pursuant to which MCV, the Owner Participant, the Owner Trustee and the various
other parties to such Lease Transaction agreed to the terms and conditions thereof (each, a
Participation Agreement), a Lease Agreement pursuant to which the Owner Trustee leases the
undivided interest to MCV (each, a Lease) and two separate Trust Indentures pursuant to
which the Owner Trustee issued Senior Notes (as defined in this Item 1, Section g, Overall
Lease Transaction  The Lease Funding) (each, a Senior Note Indenture) and Subordinated
Notes (as defined in this Item 1, Section g, Overall Lease Transaction  The Lease Funding)
(each, a Subordinated Note Indenture and, together with the Senior Note Indentures, the
Note Indentures). The Bank of New York and Wachovia Bank National Association are note
trustees under the Senior Note
 -13-




---



##### Table of Contents



Indenture and the Subordinated Note Indenture, respectively (the Note Trustees). There is a
single Collateral Agency and Intercreditor Agreement (the Intercreditor Agreement), executed
by the Owner Trustees, MCV, the Note Trustees, the Working Capital Lender (as defined below)
and U.S. Bank National Association as collateral Agent (the Collateral Agent), which
provides for the creation and maintenance of certain reserves, the deposit of all revenues
generated by the operation of the Facility, the payment of operating expenses, and the
distribution of remaining revenues according to the priorities set forth therein to or for the
account of the Working Capital Lender, the Note Trustees, the Owner Trustees, MCV and the
affiliates of certain Partners. MCV currently has arranged for a $50 million annual working
capital line (the Working Capital Facility) with a syndicate of banks (the Working Capital
Lender). As security for its obligation to repay advances made under the Working Capital
Facility, MCV has granted to the Working Capital Lender a first priority security interest in
certain receivables earned by MCV through the sale of electricity, electric generating
capacity, natural gas, or steam to third parties, including Dow, Consumers and DCC (the
Earned Receivables) and in MCVs natural gas inventory (the Natural Gas Inventory).
Payments due under the Working Capital Facility are direct obligations of MCV and will in
general have a priority in payment over payments under the Leases (and thus on the Notes (see
Item 1, Section g, Overall Lease Transaction  The Lease Funding) and the Bonds).Statement of Financial Accounting Standards (SFAS) No. 98, which applies to sale and
leaseback transactions entered into after June 30, 1988, specifies the accounting required by
generally accepted accounting principles (GAAP) for a seller-lessees sale and simultaneous
leaseback transaction involving real estate, including real estate with equipment. In
accordance with SFAS No. 98, the Overall Lease Transaction must be accounted for as a
financing obligation and not a sale, since MCV has the option to purchase the undivided
interests in the Facility at the end of the Basic Lease Term, which expires on July 23, 2015,
and has other forms of continuing involvement with the Facility throughout the Basic Lease
Term. The Lease obligation is recorded as long-term debt, at the present value of future
minimum Lease payments. There was no change to property, plant and equipment, on the
Consolidated Balance Sheet, as the transaction was accounted for as a financing arrangement
for financial reporting purposes. Certain Lease transaction expenses of MCV are recorded as
deferred financing costs and amortized using the interest method over the term of the Lease.
On an ongoing basis, the monthly accrual for the semi-annual Lease payments is divided between
interest and principal components using the effective interest method.The Lease FundingEach Owner Trustee financed the purchase of its undivided interest in the Facility through a
combination of equity invested by its related Owner Participant ($556.3 million in the
aggregate) and debt incurred through the issuance of nonrecourse notes by the Owner Trustee
under the related Note Indentures, consisting of senior secured notes ($1,200.0 million in the
aggregate) (the Senior Notes) and subordinated secured notes ($567.2 million in the
aggregate) (the Subordinated Notes, and together with the Senior Notes, the Notes). In
order to facilitate the sale of this debt (other than the debt evidenced by the Subordinated
Notes pledged to secure the Tax-Exempt Bonds) (as defined below), two funding corporations
were established. Midland Funding Corporation I was established for the purpose of issuing
various series of senior bonds (the Senior Bonds), each series secured by a pledge of the
corresponding series of Senior Notes issued by the five Owner Trustees. Midland Funding
Corporation II was established for the purpose of issuing various series of subordinated bonds
(the Subordinated Bonds and, together with the Senior Bonds, the Bonds), each series
secured by a pledge of the corresponding series of the Subordinated Notes issued by the five
Owner Trustees. These pledged Subordinated Notes are secured proportionally with the
Subordinated Notes pledged to secure the Tax-Exempt Bonds issued by the Tax-Exempt Issuer (as
defined below). The use of the funding corporations facilitated the sale of debt by
permitting the offer and sale of three series of Senior Bonds and two series of Subordinated
Bonds, each secured equally and ratably by the corresponding series of Notes issued by each of
the five Owner Trusts, thus eliminating the need to offer a greater number of separate series
of Notes to the investor. In addition, the use of a corporate obligor facilitated compliance
with certain investment laws by certain institutional purchasers of the Senior and
Subordinated Bonds. The aggregate principal amount, maturity date, interest rate, redemption
provisions and other material terms of each series of the Bonds were identical to those of the
Notes pledged as security therefore. The Senior Bonds were retired in July 2002. As
 -14-




---



##### Table of Contents



of February 1, 2006, there remains outstanding approximately $556.3 million of equity invested
by the Owner Participants and $273.8 million of Subordinated Bonds.The Economic Development Corporation of the County of Midland (the Tax-Exempt Issuer) issued
certain series of tax-exempt bonds (the Tax-Exempt Bonds), which were issued under and
secured by a tax-exempt collateral trust indenture. The proceeds from the issuance and sale
of the Tax-Exempt Bonds were used to finance certain pollution control assets constituting a
portion of the Facility. Each series of Tax-Exempt Bonds is secured solely by a corresponding
series of Subordinated Notes issued by the Owner Trustees, which are secured by a junior
security interest in the undivided interests of the Owner Trustees in the Facility and certain
of their rights under and to the related Leases, including rents thereunder and the Lease
Collateral, including (subject to the rights of the Working Capital Lender, which include a
prior security interest in certain of MCVs receivables and natural gas inventory securing the
Working Capital Facility) the revenues and other payments received thereunder. The
Subordinated Notes securing the Tax-Exempt Bonds and the Subordinated Notes issued by the
Owner Trustees to secure the Subordinated Bonds are secured by junior security interests in a
shared collateral pool.Security and Sources of PaymentThe sole sources of payment for the Subordinated Bonds were certain pledged Subordinated Notes
issued by each of the five Owner Trustees and pledged under the Subordinated Bond Indenture.
The pledged Subordinated Notes of each Owner Trustee are nonrecourse obligations of such Owner
Trustee payable solely from the rental payments made by MCV under its related Lease and the
other security therefore. The Subordinated Notes were secured by a junior (now senior)
security interest in such Owner Trustees undivided interest in the Facility and certain of
its rights under and to the related Lease, including rents and the Lease collateral, including
(subject to the rights of the Working Capital Lender) the revenues and other payments received
thereunder. The Subordinated Notes are secured on a proportional basis with the Subordinated
Notes pledged to secure the Tax-Exempt Bonds.Additional Subordinated Notes may be issued (i) to refinance any series of Subordinated Notes,
and (ii) to pay certain costs of modifying the Facility. Any Subordinated Notes will rank
proportionally with all Subordinated Notes then outstanding. The aggregate principal amount
of Subordinated Bonds that may be issued is unlimited, provided that at no time may the
aggregate principal amount of Subordinated Bonds exceed the aggregate principal amount of
Subordinated Notes, respectively, then outstanding. The future issuance of additional
Subordinated Bonds (other than for refinancing purposes) would create additional claims
against the security for the Note Indentures and the amounts available to repay amounts in
respect of the Bonds currently outstanding in the event of foreclosure.The rental payments under the Leases are established to provide funds sufficient to service
the debt issued by the Owner Trustees and to provide the Owner Participants with a return on
their equity investment. MCV is unconditionally obligated to make rental payments under the
Leases in amounts sufficient to provide for scheduled payments of the principal of, premium,
if any, and interest on the Notes, which amounts, in turn, are equal to scheduled payments of
principal of, premium, if any, and interest on the Bonds. MCV has pledged to each Owner
Trustee an undivided interest percentage of all revenues to be derived from the operation of
the Facility, together with its rights with respect to the PPA, the SEPA, and various other
contracts of MCV relating to the Facility (the Lease Collateral) to secure its rental
obligations under the Leases. Neither the Bonds nor the Notes are direct obligations of, or
guaranteed by, MCV nor do any Partners of MCV have any liability under the terms of the Notes,
the Bonds or the Leases. Neither the Partners nor the Partner affiliates have any obligations
under the Leases, and the obligations of MCV under the Leases and the other documents related
to the Overall Lease Transaction are nonrecourse to the Partners and the Partner affiliates.Any default or foreclosure with respect to the undivided interest of an Owner Trustee relates
solely to such undivided interest. There is no cross-collateralization among Owner Trustees
and the Subordinated Bond trustee as holder of the Subordinated Notes. The Leases, however,
contain identical events of default including an event of default related to a failure by MCV
to pay principal of or interest on any indebtedness for
 -15-




---



##### Table of Contents



borrowed money or other financing obligations (including lease obligations) with respect to an
amount greater than $10 million.Pursuant to the Intercreditor Agreement, a reserve account has been created for the benefit of
the holders of the Notes, which had been initially funded with $90 million in cash (the
Reserve Account). The Intercreditor Agreement sets forth circumstances under which amounts
in the Reserve Account are to be maintained at not less than $40 million, will be adjusted to
equal the lesser of $137 million or the debt portion of basic rent under the Leases payable on
the next succeeding basic rent payment date, and limited circumstances under which no more
than $10 million contained therein may be withdrawn therefrom to provide working capital. As
of December 31, 2005, MCV had funds of $90.1 million in the Reserve Account. Excess funds in
the Reserve Account are periodically transferred to MCV.
 
 h.
    
    Forward-Looking Statements and Information
 Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995. This
Annual Report on Form 10-K contains certain forward-looking statements as defined by the
Private Securities Litigation Reform Act of 1995 (the Act), including without limitation,
discussion as to expectations, beliefs, plans, objectives and future financial performance, or
assumptions underlying or concerning matters discussed reflecting MCVs current expectations of
the manner in which the various factors discussed therein may affect its business in the
future. Any matters that are not historical facts are forward-looking and, accordingly,
involve estimates, assumptions, and uncertainties that could cause actual results or outcomes
to differ materially from those expressed in the forward-looking statements. Accordingly, this
Safe Harbor Statement contains additional information about such factors relating to the
forward-looking statements. There is no assurance, however, that MCVs expectations will be
realized or that unexpected events will not have an adverse impact on MCVs business.Some important factors that could cause actual results or outcomes to differ materially from
those discussed in the forward-looking statements include governmental policies, legislation
and other regulatory actions (including those of the Michigan Legislature, Congress, Federal
Energy Regulatory Commission and the Michigan Public Service Commission) with respect to cost
recovery under the PPA, industry restructuring or deregulation, operation of plant facilities
including natural gas pipeline and storage facilities, Consumers ability to perform its
obligations under the PPA and present or prospective wholesale and retail competition, among
other factors. The business and profitability of MCV is also influenced by other factors such
as pricing and transportation of natural gas, changes in accounting standards (such as
accounting for derivative instruments and hedging activities) and environmental
legislation/regulation. All such factors are difficult to predict, contain uncertainties which
may materially affect actual results, and are beyond the control of MCV.
 
 Item 1A.  RISK FACTORS
 If natural gas prices remain at current levels or increase for a prolonged period MCV may not be
able to meet its obligations under the sale leaesback transaction and other contracts.
  -16-




---



##### Table of Contents



The inability of MCV or Consumers to perform under the Power Purchase Agreement (PPA) and
related contracts could adversely affect MCVs business.
   
 Item 1B.  UNRESOLVED STAFF COMMENTS
  
 Item 2.  PROPERTIES
   -17-




---



##### Table of Contents



Item 3.  LEGAL PROCEEDINGS
 Property Taxes
  NOx Allowances
  Michigan Department of Environmental Quality Enforcement Action
   -18-




---



##### Table of Contents



Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  -19-




---



##### Table of Contents



Item 5.  MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
  
 Item 6.  SELECTED FINANCIAL DATA
 (Dollars in Thousands)Years Ended December 31,
    
    2005
    
    2004
    
    2003
    
    2002
    
    2001STATEMENT OF OPERATIONS DATA:Operating Revenues
    
    $
    591,899
    
    
    $
    649,659
    
    
    $
    584,412
    
    
    $
    596,819
    
    
    $
    610,813Asset Impairment Loss(1)
    
    
    (1,159,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating Income (Loss)
    
    
    (835,079
    )
    
    
    75,539
    
    
    
    167,938
    
    
    
    188,124
    
    
    
    157,835Net Income (Loss) Before
Cumulative Effect of Accounting
Change
    
    
    (917,444
    )
    
    
    (23,619
    )
    
    
    59,791
    
    
    
    73,896
    
    
    
    48,264Cumulative Effect of Change in
Method of Accounting for
Derivative Option Contracts (to
April 1, 2002) (2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58,131
    
    
    
    Net Income (Loss)
    
    
    (917,444
    )
    
    
    (23,619
    )
    
    
    59,791
    
    
    
    132,027
    
    
    
    48,264BALANCE SHEET DATA: (3)Total Assets
    
    
    1,317,878
    
    
    
    1,980,377
    
    
    
    2,069,650
    
    
    
    2,098,073
    
    
    
    2,117,047CapitalizationPartners Equity
    
    
    1,602
    
    
    
    809,976
    
    
    
    799,076
    
    
    
    734,310
    
    
    
    551,712Long-term Debt, Excluding
Current Maturities
    
    
    878,638
    
    
    
    942,097
    
    
    
    1,018,645
    
    
    
    1,153,221
    
    
    
    1,243,060
 
 (1)
    
    In September 2005, MCV concluded that the carrying value of the MCVs asset group
exceeded cash flows that would be generated by the Facility on an undiscounted basis and
therefore, under SFAS No. 144, an impairment adjustment was required to reduce the carrying
value to the estimated fair value. The fair value of the asset group was determined by
discounting a set of probability-weighted streams of future cash flows at a 4.3% risk free
interest rate. (See Part IV, Item 15, Notes to Consolidated Financial Statements  Note 3
Asset Impairment.)(2)
    
    Effective April 1, 2002, the FASB issued guidance regarding natural gas commodity
contracts that combine an option component and a forward component. This guidance requires
either that the entire contract be accounted for as a derivative or the components of the
contract be separated into two discrete contracts. As of April 1, 2002, MCV had nine
long-term gas contracts that each contain both an option and forward component. As such, they
are no longer accounted for under the normal purchases and sales exception and MCV began
mark-to-market accounting of these nine contracts through earnings. Based on the natural gas
prices, at the beginning of April 2002, MCV recorded a $58.1 million gain for the cumulative
effect of this accounting change. Subsequent gains and losses were recorded as operating
costs.(3)
    
    Balance sheet data consists of the balances at December 31. -20-




---



##### Table of Contents



Item 7.  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)
 Outlook
  Operating Outlook.
 Energy Rates and Cost of Production.
   -21-




---



##### Table of Contents



Capacity and Energy Payments Under the PPA.
 Michigan Electric Industry Restructuring.
   -22-




---



##### Table of Contents



Federal Electric Industry Restructuring
  Results of Operations
 Overview
   -23-




---



##### Table of Contents



Operating Revenues
  2005
    
    2004
    
    2003Operating Revenues
    
    $
    591,899
    
    
    $
    649,659
    
    
    $
    584,412Capacity Revenue
    
    $
    403,722
    
    
    $
    405,415
    
    
    $
    404,681PPA Contract Capacity (MW)
    
    
    1,240
    
    
    
    1,240
    
    
    
    1,240Billed PPA Availability
    
    
    98.5
    %
    
    
    98.5
    %
    
    
    98.5
    %Electric Revenue
    
    $
    167,577
    
    
    $
    225,154
    
    
    $
    162,093PPA Delivery as Percentage of Contract Capacity
    
    
    53.3
    %
    
    
    93.0
    %
    
    
    62.8
    %PPA, SEPA and Other Electric Deliveries (MWh)
    
    
    6,301,697
    
    
    
    10,663,074
    
    
    
    7,348,969Average PPA Variable Energy Rate ($ / MWh)
    
    $
    18.14
    
    
    $
    15.90
    
    
    $
    15.71Average PPA Fixed Energy Rate ($ / MWh)
    
    $
    4.21
    
    
    $
    3.89
    
    
    $
    3.67Steam Revenue
    
    $
    20,600
    
    
    $
    19,090
    
    
    $
    17,638Steam Deliveries (Mlbs)
    
    
    5,639,670
    
    
    
    5,714,580
    
    
    
    5,634,390
   Operating Expenses
  -24-




---



##### Table of Contents



Other Income (Expense)
   Liquidity and Capital Resources
   -25-




---



##### Table of Contents



Disclosure about Contractual Obligations
  Payments Due by Period (1) (In Millions)Less Than
    
    
    One to
    
    
    Three to
    
    
    More ThanContractual Obligations
    
    Total
    
    
    One Year
    
    
    Three Years
    
    
    Five Years
    
    
    Five YearsLong-term Debt (2)
    
    $
    1,346.9
    
    
    $
    156.0
    
    
    $
    301.8
    
    
    $
    280.1
    
    
    $
    609.0Unconditional Purchase Obligations(3)
    
    $
    3,380.7
    
    
    $
    601.4
    
    
    $
    1,277.9
    
    
    $
    904.1
    
    
    $
    597.3Other Long-term Obligations (4)
    
    
    193.6
    
    
    
    24.9
    
    
    
    22.5
    
    
    
    30.6
    
    
    
    115.6Total Contractual Cash Obligations
    
    $
    3,574.3
    
    
    $
    626.3
    
    
    $
    1,300.4
    
    
    $
    934.7
    
    
    $
    712.9
 Amount of Commitment Expiration Per PeriodLess Than
    
    
    One to
    
    
    Three to
    
    
    More ThanCommercial Commitments
    
    Total
    
    
    One Year
    
    
    Three Years
    
    
    Five Years
    
    
    Five YearsWorking Capital Facility
    
    $
    50.0
    
    
    $
    50.0
    
    
    $
    
    
    
    $
    
    
    
    $
    
 
 (1)
    
    Payment periods represent calendar years beginning with January 1, 2006.(2)
    
    Represents expected cash payments, including interest.(3)
    
    Represents estimated minimum commitments under current long-term natural gas
contracts, natural gas transportation reservation charges, GTG compressor parts and the ground
lease agreement.(4)
    
    Represents the cost of current Facility maintenance service agreements, spare parts
and DCC termination payment.(5)
    
    No amounts have been included for early termination fees under the PPA or SEPA. New Accounting Standards
  -26-




---



##### Table of Contents



Off-Balance Sheet Arrangements
  Critical Accounting Policies
  Electric Industry Restructuring.
 Natural Gas Contracts.
   -27-




---



##### Table of Contents



Recoverability of Long-Lived Assets
   Property Tax Appeals
 -28-




---



##### Table of Contents



Item 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rate Risk.
   Expected Maturity In2006
    
    2007
    
    2008
    
    2009
    
    2010
    
    Thereafter
    
    Total
    
    Fair ValueDebt:Long-term Debt Fixed
Rate (in millions)
    
    $
    156.0
    
    
    $
    150.9
    
    
    $
    150.9
    
    
    $
    147.1
    
    
    $
    133.0
    
    
    $
    609.0
    
    
    $
    1,346.9
    
    
    
    N/AAvg. Interest Rate
    
    
    9.4
    %
    
    
    9.4
    %
    
    
    9.4
    %
    
    
    9.4
    %
    
    
    9.4
    %
    
    
    9.4
    %
    
    
    9.4
    %
 Commodity Risk.
  Expected Maturity in 2006/2007
    
    Fair ValueFutures Contracts:Contract Volumes (10,000 MMBtu) Long/Buy
    
    
    1,929
    
    
    
    Weighted Average Price Long (per 10,000 MMBtu)
    
    $
    6.004
    
    
    $
    10.549Contract Amount ($US in Millions)
    
    $
    115.8
    
    
    $
    203.5
 Expected Maturity in 2006/2009
    
    Fair ValueNYMEX Commodity Swap Contracts:Contract Volumes (10,000 MMBtu) Long/Buy
    
    
    3,091
    
    
    
    Weighted Average Price Long (per 10,000 MMBtu)
    
    $
    4.596
    
    
    $
    8.969Contract Amount ($US in Millions)
    
    $
    142.1
    
    
    $
    277.3
 -29-




---



##### Table of Contents



Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
 Item 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 Item 9A.  CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Managements Report on Internal Control Over Financial Reporting
    Internal Control  Integrated Framework
 Changes in Internal Control Over Financial Reporting
  -30-




---



##### Table of Contents



Item 9B.  OTHER INFORMATION
  -31-




---



##### Table of Contents



Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
  Management Committee
 David W. Joos
    
    
    (52
    )
    
    Management Committee Chairman (term ended in January 2006)Thomas W. Elward
    
    
    (57
    )
    
    Management Committee Chairman (term began in January 2006)Stephen R. McKemy
    
    
    (51
    )
    
    Management Committee MemberExecutive
OfficersJames M. Kevra
    
    
    (57
    )
    
    President and Chief Executive OfficerBruce C. Grant
    
    
    (59
    )
    
    Vice President of Human Resources, Communications and Public AffairsGary B. Pasek
    
    
    (50
    )
    
    Vice President, General Counsel and SecretaryJames M. Rajewski
    
    
    (58
    )
    
    Chief Financial Officer, Vice President and ControllerLaurie M. Valasek
    
    
    (38
    )
    
    Vice President and TreasurerKevin R. Olling
    
    
    (41
    )
    
    Vice President of Energy Supply and Marketing
   -32-




---



##### Table of Contents



Audit Subcommittee Financial Expert
  -33-




---



##### Table of Contents



Code of Ethics
  Midland Cogeneration Venture Limited PartnershipAttn: Chief Financial Officer100 Progress PlaceMidland, MI 48640
 -34-




---



##### Table of Contents



Item 11. EXECUTIVE COMPENSATION
 Compensation
  Summary Compensation Table
 Annual CompensationName and
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other AnnualPrincipal Position
    
    Year
    
    Salary ($)
    
    Bonus ($)(a)
    
    Compensation ($)James M. Kevra
President and 
Chief Executive Officer
    
    
    2005
2004
2003
    
    
    
    292,028
300,525
279,766
    
    
    
    
25,000
171,692
    
    
    
    56,269
57,599
54,484
    (b)Gary B. Pasek
Vice President
General Counsel & Secretary
    
    
    2005
2004
2003
    
    
    
    210,115
205,266
183,239
    
    
    
    69,577
91,309
135,665
    
    
    
    31,327
30,679
27,377
    (c)James M. Rajewski
Chief Financial Officer,
Vice President and Controller
    
    
    2005
2004
2003
    
    
    
    171,461
169,136
152,600
    
    
    
    55,408
81,195
67,556
    
    
    
    25,555
25,213
22,738
    (d)(g)Bruce C. Grant
Vice President Human
Resources, Communications
and Public Affairs
    
    
    2005
2004
    
    
    
    120,752
120,260
    
    
    
    26,605
34,173
    
    
    
    17,987
17,918
    (e)(g)Laurie M. Valasek 
Vice President and Treasurer
    
    
    2005
    
    
    
    91,140
    
    
    
    16,922
    
    
    
    9,110
    (f)
  (a)
    
    The amounts represent bonuses accrued.(b)
    
    Includes company contributions of $10,500 to the 401(k) Savings Plan, $17,500 to the Defined
Contribution Retirement Plan and $28,269 to the Supplemental Retirement Plan.(c)
    
    Includes company contributions of $10,442 to the 401(k) Savings Plan, $17,558 to the Defined
Contribution Retirement Plan and $3,327 to the Supplemental Retirement Plan.(d)
    
    Includes company contributions of $8,518 to the 401(k) Savings Plan and $17,037 to the
Defined Contribution Retirement Plan.(e)
    
    Includes company contributions of $5,995 to the 401(k) Savings Plan and $11,992 to the
Defined Contribution Retirement Plan.(f)
    
    Includes company contributions of $4,555 to the 401(k) Savings Plan and $4,555 to the Defined
Contribution Retirement Plan.(g)
    
    Mr. Rajewski and Mr. Grant both received distributions from the Retiree Health Plan in the
amount of $172,615 each, of which $112,200 was placed into a secular trust and the balance
used to cover the taxes owed on the distribution.
 -35-




---



##### Table of Contents



Long-Term Performance Award
  Organization and Compensation Subcommittee, Interlocks and Insider Participation
     -36-




---



##### Table of Contents



Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
  Security Ownership of Certain Beneficial Owners
 Amount and Nature of Beneficial OwnershipApproximate Percent of
    
    Approximate Percent ofName and Address of Beneficial Owner
    
    Title of Class
    
    Voting Rights (a)
    
    Partnership InterestEl Paso CorporationEl Paso Building1001 Louisiana StreetHouston, TX 77002Source Midland Limited Partnership
    
    General Partnership Interest
    
    24.2%
    
    18.1%El Paso Midland, Inc.
    
    General Partnership Interest
    
    14.6%
    
    10.9%MEI Limited Partnership
    
    General Partnership Interest
    
    12.2%
    
    9.1%Limited Partnership Interest
    
    
    
    0.9%Micogen Limited Partnership
    
    Limited Partnership Interest
    
    
    
    4.5%Total El Paso Ownership
    
    
    
    51.0%
    
    43.5%CMS Energy CorporationOne Energy PlazaJackson, MI 49201-2276CMS Midland, Inc.
    
    General Partnership Interest
    
    49.0%
    
    49.0%The Dow Chemical Company
    
    Limited Partnership Interest
    
    
    
    7.5%2030 Dow CenterMidland, MI 48674Alanna Corporation
    
    Limited Partnership Interest
    
    
    
    0.00001%c/o MCV Limited Partnership100 Progress PlaceMidland, MI 48640100.0%
    
    100.0%
  (a)
    
    Each partner has sole voting and investment power with respect to its general partnership
interest. Limited partners have no voting rights, except to certain specified acts of the
Management Committee. MCV is a limited partnership wholly owned by its Partners. Beneficial
interests in the partnership are not available to any persons other than the Partners.
Accordingly, none of the members of the Management Committee and none of the executive
officers of MCV has any beneficial ownership in MCV.
 
 Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  -37-




---



##### Table of Contents



Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
 Fees
  Audit Subcommittee Pre-Approval Policies and Procedures
  -38-




---



##### Table of Contents



Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a)
    
    The following documents are filed as part of this report:
 1.
    
    Financial statements.
  PageIndex to Consolidated Financial Statements
    
    F-1Report of Independent Registered Public Accounting Firm
    
    F-2Consolidated Balance Sheets
    
    F-4Consolidated Statements of Operations
    
    F-5Consolidated Statements of Partners Equity and Comprehensive Income (Loss)
    
    F-6Consolidated Statements of Cash Flows
    
    F-7Notes to Consolidated Financial Statements
    
    F-8
 2.
    
    All schedules are omitted because they are inapplicable, not required or the
information is included in the financial statements or notes thereto.
 3.
    
    The Exhibits that are filed or incorporated by reference as part of this report are
listed in the Exhibit Index filed herewith.
 -39-




---



##### Table of Contents



Page Referencein Annual Reporton Form 10-KReport of Independent Registered Public Accounting Firm
    
    F-2Consolidated Balance Sheets as of December 31, 2005 and 2004
    
    F-4Consolidated Statements of Operations for the Years Ended December 31, 2005, 2004, and 2003
    
    F-5Consolidated Statements of Partners Equity and Comprehensive Income (Loss) for the Years
Ended December 31, 2005, 2004, and 2003
    
    F-6Consolidated Statements of Cash Flows for the Years Ended December 31, 2005, 2004, and 2003
    
    F-7Notes to Consolidated Financial Statements
    
    F-8
 F-1




---



##### Table of Contents



Consolidated financial statements
  Internal control over financial reporting
   F-2




---



##### Table of Contents



F-3




---



##### Table of Contents



2005
    
    
    2004ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    360,562
    
    
    $
    125,781Accounts and notes receivable  related parties
    
    
    30,514
    
    
    
    54,368Accounts receivable
    
    
    108,393
    
    
    
    42,984Gas inventory
    
    
    16,138
    
    
    
    17,509Unamortized property taxes
    
    
    18,238
    
    
    
    18,060Derivative assets
    
    
    241,135
    
    
    
    94,977Broker margin accounts and prepaid expenses
    
    
    20,294
    
    
    
    13,147Total current assets
    
    
    795,274
    
    
    
    366,826PROPERTY, PLANT AND EQUIPMENT:Property, plant and equipment
    
    
    2,479,071
    
    
    
    2,466,944Pipeline
    
    
    21,432
    
    
    
    21,432Total property, plant and equipment
    
    
    2,500,503
    
    
    
    2,488,376Accumulated depreciation (Note 3)
    
    
    (2,276,089
    )
    
    
    (1,062,821
    )Net property, plant and equipment
    
    
    224,414
    
    
    
    1,425,555OTHER ASSETS:Restricted investment securities held-to-maturity
    
    
    90,915
    
    
    
    139,410Derivative assets non-current
    
    
    186,336
    
    
    
    24,337Deferred financing costs, net of accumulated amortization
of $19,580 and $18,498, respectively
    
    
    5,385
    
    
    
    6,467Prepaid gas costs, spare parts deposit, materials and supplies
    
    
    15,554
    
    
    
    17,782Total other assets
    
    
    298,190
    
    
    
    187,996TOTAL ASSETS
    
    $
    1,317,878
    
    
    $
    1,980,377LIABILITIES AND PARTNERS EQUITYCURRENT LIABILITIES:Accounts payable and accrued liabilities  related parties
    
    $
    16,651
    
    
    $
    12,772Accounts payable and accrued liabilities
    
    
    118,663
    
    
    
    69,921Gas supplier funds on deposit  related parties
    
    
    44,353
    
    
    
    Gas supplier funds on deposit
    
    
    148,650
    
    
    
    19,613Interest payable
    
    
    45,057
    
    
    
    47,738Current portion of long-term debt
    
    
    63,459
    
    
    
    76,548Total current liabilities
    
    
    436,833
    
    
    
    226,592NON-CURRENT LIABILITIES:Long-term debt
    
    
    878,638
    
    
    
    942,097Other
    
    
    805
    
    
    
    1,712Total non-current liabilities
    
    
    879,443
    
    
    
    943,809COMMITMENTS AND CONTINGENCIES (Notes 8 and 9)TOTAL LIABILITIES
    
    
    1,316,276
    
    
    
    1,170,401PARTNERS EQUITY
    
    
    1,602
    
    
    
    809,976TOTAL LIABILITIES AND PARTNERS EQUITY
    
    $
    1,317,878
    
    
    $
    1,980,377
  F-4




---



##### Table of Contents



2005
    
    
    2004
    
    
    2003OPERATING REVENUES:Capacity
    
    $
    403,722
    
    
    $
    405,415
    
    
    $
    404,681Electric
    
    
    167,577
    
    
    
    225,154
    
    
    
    162,093Steam
    
    
    20,600
    
    
    
    19,090
    
    
    
    17,638Total operating revenues
    
    
    591,899
    
    
    
    649,659
    
    
    
    584,412OPERATING EXPENSES:Fuel costs (Note 2)
    
    
    124,610
    
    
    
    413,061
    
    
    
    254,988Depreciation
    
    
    73,845
    
    
    
    88,712
    
    
    
    89,437Operations
    
    
    16,114
    
    
    
    18,769
    
    
    
    16,943Maintenance
    
    
    7,958
    
    
    
    13,508
    
    
    
    15,107Property and single business taxes
    
    
    29,580
    
    
    
    28,834
    
    
    
    30,040Administrative, selling and general
    
    
    15,871
    
    
    
    11,236
    
    
    
    9,959Asset impairment loss (Note 3)
    
    
    1,159,000
    
    
    
    
    
    
    
    Total operating expenses
    
    
    1,426,978
    
    
    
    574,120
    
    
    
    416,474OPERATING INCOME (LOSS)
    
    
    (835,079
    )
    
    
    75,539
    
    
    
    167,938OTHER INCOME (EXPENSE):Interest and other income
    
    
    14,365
    
    
    
    5,460
    
    
    
    5,100Interest expense
    
    
    (96,730
    )
    
    
    (104,618
    )
    
    
    (113,247
    )Total other income (expense), net
    
    
    (82,365
    )
    
    
    (99,158
    )
    
    
    (108,147
    )NET INCOME (LOSS)
    
    $
    (917,444
    )
    
    $
    (23,619
    )
    
    $
    59,791
  F-5




---



##### Table of Contents



General
    
    
    LimitedPartners
    
    
    Partners
    
    
    TotalBALANCE, DECEMBER 31, 2002
    
    $
    627,947
    
    
    $
    106,363
    
    
    $
    734,310Comprehensive IncomeNet Income
    
    
    52,056
    
    
    
    7,735
    
    
    
    59,791Other Comprehensive IncomeUnrealized gain on hedging activities
since beginning of period
    
    
    34,484
    
    
    
    5,125
    
    
    
    39,609Reclassification adjustments recognized
in net income above
    
    
    (30,153
    )
    
    
    (4,481
    )
    
    
    (34,634
    )Total other comprehensive income
    
    
    4,331
    
    
    
    644
    
    
    
    4,975Total Comprehensive Income
    
    
    56,387
    
    
    
    8,379
    
    
    
    64,766BALANCE, DECEMBER 31, 2003
    
    $
    684,334
    
    
    $
    114,742
    
    
    $
    799,076Comprehensive IncomeNet Loss
    
    
    (20,563
    )
    
    
    (3,056
    )
    
    
    (23,619
    )Other Comprehensive IncomeUnrealized gain on hedging activities
since beginning of period
    
    
    62,292
    
    
    
    9,256
    
    
    
    71,548Reclassification adjustments recognized
in net income above
    
    
    (32,239
    )
    
    
    (4,790
    )
    
    
    (37,029
    )Total other comprehensive income
    
    
    30,053
    
    
    
    4,466
    
    
    
    34,519Total Comprehensive Income
    
    
    9,490
    
    
    
    1,410
    
    
    
    10,900BALANCE, DECEMBER 31, 2004
    
    $
    693,824
    
    
    $
    116,152
    
    
    $
    809,976Comprehensive IncomeNet Loss
    
    
    (798,754
    )
    
    
    (118,690
    )
    
    
    (917,444
    )Other Comprehensive IncomeUnrealized gain on hedging activities
since beginning of period
    
    
    141,965
    
    
    
    21,095
    
    
    
    163,060Reclassification adjustments recognized
in net income above
    
    
    (21,496
    )
    
    
    (3,194
    )
    
    
    (24,690
    )Dedesignated cash flow hedges (Note 2)
    
    
    (25,509
    )
    
    
    (3,791
    )
    
    
    (29,300
    )Total other comprehensive income
    
    
    94,960
    
    
    
    14,110
    
    
    
    109,070Total Comprehensive Loss
    
    
    (703,794
    )
    
    
    (104,580
    )
    
    
    (808,374
    )BALANCE, DECEMBER 31, 2005
    
    $
    (9,970
    )
    
    $
    11,572
    
    
    $
    1,602
  F-6




---



##### Table of Contents



2005
    
    
    2004
    
    
    2003CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)
    
    $
    (917,444
    )
    
    $
    (23,619
    )
    
    $
    59,791Adjustments to reconcile net income (loss) to net cash provided
by operating activitiesDepreciation and amortization
    
    
    74,927
    
    
    
    89,925
    
    
    
    90,792Asset impairment loss
    
    
    1,159,000
    
    
    
    
    
    
    
    (Increase) decrease in derivative assets
    
    
    (199,087
    )
    
    
    20,130
    
    
    
    4,906Increase in accounts receivable
    
    
    (41,555
    )
    
    
    (15,214
    )
    
    
    (1,211
    )(Increase) decrease in gas inventory
    
    
    1,371
    
    
    
    2,789
    
    
    
    (732
    )(Increase) decrease in unamortized property taxes
    
    
    (178
    )
    
    
    (388
    )
    
    
    683Increase in broker margin accounts and prepaid expenses
    
    
    (7,147
    )
    
    
    (5,046
    )
    
    
    (4,778
    )(Increase) decrease in prepaid gas costs, materials and supplies
    
    
    2,228
    
    
    
    3,841
    
    
    
    (8,704
    )Increase (decrease) in accounts payable and accrued liabilities
    
    
    52,621
    
    
    
    25,775
    
    
    
    (712
    )Increase in gas supplier funds on deposit
    
    
    173,390
    
    
    
    15,096
    
    
    
    4,517Decrease in interest payable
    
    
    (2,681
    )
    
    
    (5,271
    )
    
    
    (3,377
    )Increase (decrease) in other non-current liabilities
    
    
    (907
    )
    
    
    (1,197
    )
    
    
    311Net cash provided by operating activities
    
    
    294,538
    
    
    
    106,821
    
    
    
    141,486CASH FLOWS FROM INVESTING ACTIVITIES:Plant modifications and purchases of plant equipment
    
    
    (31,704
    )
    
    
    (20,460
    )
    
    
    (33,278
    )Maturity of restricted investment securities held-to-maturity
    
    
    318,192
    
    
    
    674,553
    
    
    
    601,225Purchase of restricted investment securities held-to-maturity
    
    
    (269,697
    )
    
    
    (674,208
    )
    
    
    (602,279
    )Net cash provided by (used in) investing activities
    
    
    16,791
    
    
    
    (20,115
    )
    
    
    (34,332
    )CASH FLOWS FROM FINANCING ACTIVITIES:Repayment of financing obligation
    
    
    (76,548
    )
    
    
    (134,576
    )
    
    
    (93,928
    )Net cash used in financing activities
    
    
    (76,548
    )
    
    
    (134,576
    )
    
    
    (93,928
    )NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    234,781
    
    
    
    (47,870
    )
    
    
    13,226CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    125,781
    
    
    
    173,651
    
    
    
    160,425CASH AND EQUIVALENTS AT END OF PERIOD
    
    $
    360,562
    
    
    $
    125,781
    
    
    $
    173,651
  F-7




---



##### Table of Contents



(1)
    
    THE PARTNERSHIP AND ASSOCIATED RISKS
       F-8




---



##### Table of Contents



(2)
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  F-9




---



##### Table of Contents



Principles of Consolidation and Operating Segments
  Revenue Recognition
  Fuel Costs
   Accounts Receivable
  Inventory
  F-10




---



##### Table of Contents



Materials and Supplies
  Depreciation
  Federal Income Tax
  Statement of Cash Flows
  Fair Value of Financial Instruments
  Accounting for Derivative Instruments and Hedging Activities
  F-11




---



##### Table of Contents



Electric Sales Agreements
  Natural Gas Supply Contracts
  Natural Gas Credit Risk
  Mark-to-Market Activity
   F-12




---



##### Table of Contents



Natural Gas Supply Futures and Options Which Qualify for Hedge Accounting
     F-13




---



##### Table of Contents



Accumulated Other Comprehensive Income
  2005
    
    
    2004
    
    
    2003Beginning Accumulated Other Comprehensive Income
    
    $
    65,774
    
    
    $
    31,255
    
    
    $
    26,280Unrealized gain on hedging activities
    
    
    163,060
    
    
    
    71,548
    
    
    
    39,609Reclassification adjustments recognized in
net income
    
    
    (24,690
    )
    
    
    (37,029
    )
    
    
    (34,634
    )Dedesignated cash flow hedges
    
    
    (29,300
    )
    
    
    
    
    
    
    Ending Accumulated Other Comprehensive Income
    
    $
    174,844
    
    
    $
    65,774
    
    
    $
    31,255
 New Accounting Standard
  ASSET IMPAIRMENT
    F-14




---



##### Table of Contents



RESTRICTED INVESTMENT SECURITIES HELD-TO-MATURITY
  2005
    
    
    2004Funds restricted for rental payments pursuant to the
Overall Lease Transaction
    
    $
    90,111
    
    
    $
    138,150Funds restricted for management non-qualified plans
    
    
    804
    
    
    
    1,260Total
    
    $
    90,915
    
    
    $
    139,410
 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
  2005
    
    
    2004Accounts payable  related parties
    
    $
    16,651
    
    
    $
    12,772Accounts payable  non-relatedTrade creditors
    
    $
    100,956
    
    
    $
    53,476Property and single business taxes
    
    
    11,088
    
    
    
    11,833Other
    
    
    6,619
    
    
    
    4,612Total accounts payable  non-related
    
    $
    118,663
    
    
    $
    69,921
 F-15




---



##### Table of Contents



GAS SUPPLIER FUNDS ON DEPOSIT
  2005
    
    2004Cash or letters of credit supplied by MCV to others:Cash paid, recorded in Broker margin accounts and prepaid
expenses
    
    $
    16,520
    
    
    $
    8,670Letters of credit provided to others
    
    
    2,430
    
    
    
    2,430Cash or letters of credit supplied to MCV by others:Cash received, recorded in Gas supplier funds on deposit
    
    
    148,650
    
    
    
    19,613Cash received by El Paso (a related party), recorded in Gas
supplier funds on deposit  related parties
    
    
    44,353
    
    
    
    Letters of credit provided to MCV from non-related parties
    
    
    21,700
    
    
    
    24,600Letters of credit provided to MCV by El Paso (a related party)
    
    
    385,700
    
    
    
    184,000
 LONG-TERM DEBT
  2005
    
    
    2004Financing obligation, maturing through 2015,
payable in semi-annual installments of
principal and interest, collateralized by
property, plant and equipment
    
    $
    942,097
    
    
    $
    1,018,645Less current portion
    
    
    (63,459
    )
    
    
    (76,548
    )Total long-term debt
    
    $
    878,638
    
    
    $
    942,097
 Financing Obligation
   F-16




---



##### Table of Contents



Principal
    
    
    Interest
    
    
    Total2006
    
    $
    63,459
    
    
    $
    92,515
    
    
    $
    155,9742007
    
    
    62,916
    
    
    
    87,988
    
    
    
    150,9042008
    
    
    67,753
    
    
    
    83,163
    
    
    
    150,9162009
    
    
    70,335
    
    
    
    76,755
    
    
    
    147,0902010
    
    
    62,917
    
    
    
    70,085
    
    
    
    133,002$
    327,380
    
    
    $
    410,506
    
    
    $
    737,886
 Revolving Credit Agreement
  F-17




---



##### Table of Contents



Intercreditor Agreement
  COMMITMENTS AND OTHER AGREEMENTS
  Power Purchase Agreement
 th th
 Steam and Electric Power Agreement
   Steam Purchase Agreement
  F-18




---



##### Table of Contents



Gas Supply Agreements
  Gas Transportation Agreements
  Gas Turbine Service Agreements
  F-19




---



##### Table of Contents



Steam Turbine Service Agreement
  Site Lease
   CONTINGENCIES
 Property Taxes
  NOx Allowances
  F-20




---



##### Table of Contents



Environmental Issues
   RETIREMENT BENEFITS
 Postretirement Health Care Plans
  F-21




---



##### Table of Contents



2005
    
    
    2004Change in benefit obligation:Benefit obligation at beginning of year
    
    $
    4,972.6
    
    
    $
    3,276.0Service cost
    
    
    311.5
    
    
    
    232.1Interest cost
    
    
    230.1
    
    
    
    174.8Actuarial gain
    
    
    9.2
    
    
    
    1,298.0Benefits paid during year
    
    
    (108.0
    )
    
    
    (8.3
    )Benefit obligation at end of year
    
    
    5,415.4
    
    
    
    4,972.6Change in Plan assets:Fair value of Plan assets at beginning of year
    
    
    3,317.7
    
    
    
    2,826.8Actual return on Plan assets
    
    
    246.2
    
    
    
    292.7Employer contribution
    
    
    426.3
    
    
    
    206.5Benefits paid during year
    
    
    (108.0
    )
    
    
    (8.3
    )Fair value of Plan assets at end of year
    
    
    3,882.2
    
    
    
    3,317.7Unfunded status
    
    
    1,533.2
    
    
    
    1,654.9Unrecognized prior service cost
    
    
    (141.6
    )
    
    
    (155.9
    )Unrecognized net loss
    
    
    (1,378.4
    )
    
    
    (1,499.0
    )Accrued benefit cost
    
    $
    13.2
    
    
    $
    
  2005
    
    
    2004
    
    
    2003Components of net periodic benefit cost:Service cost
    
    $
    311.5
    
    
    $
    232.1
    
    
    $
    212.5Interest cost
    
    
    230.1
    
    
    
    174.8
    
    
    
    178.2Expected return on Plan assets
    
    
    (187.7
    )
    
    
    (216.1
    )
    
    
    (163.7
    )Amortization of unrecognized net loss
    
    
    85.6
    
    
    
    15.7
    
    
    
    30.5Net periodic benefit cost
    
    $
    439.5
    
    
    $
    206.5
    
    
    $
    257.5
 F-22




---



##### Table of Contents



1-Percentage-
    
    1-PercentagePoint Increase
    
    Point DecreaseEffect on total of service and interest cost components
    
    $
    53.2
    
    
    $
    76.4Effect on postretirement benefit obligation
    
    $
    545.1
    
    
    $
    475.9
  2005
    
    2004
    
    2003Discount rate
    
    
    5.50
    %
    
    
    5.75
    %
    
    
    6.00
    %Long-term rate of return on Plan assets
    
    
    8.00
    %
    
    
    8.00
    %
    
    
    8.00
    %Inflation benefit amount1999 through 2005
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    0.00
    %2006 and later years
    
    
    5.00
    %
    
    
    5.00
    %
    
    
    4.00
    %
  Plan Assets
   Asset Category:
    
    2005
    
    2004Cash and cash equivalents
    
    
    8
    %
    
    
    1
    %Fixed income
    
    
    16
    %
    
    
    19
    %Equity securities
    
    
    76
    %
    
    
    80
    %Total
    
    
    100
    %
    
    
    100
    %
 Contributions
 Retirement and Savings Plans
  F-23




---



##### Table of Contents



Supplemental Retirement Benefits
  F-24




---



##### Table of Contents



PARTNERS EQUITY AND RELATED PARTY TRANSACTIONS
  Beneficial Owner, Equity Partner,
    
    EquityType of Partner and Nature of Related Party
    
    Interest
    
    
    Interest
    
    
    Related Related Party Transactions and Agreements
    
    2005
    
    
    2004
    
    
    2003CMS Energy
CompanyCMS Midland, Inc.
    
    $
    784
    
    
    
    49.0
    %
    
    Power purchase agreements
    
    $
    372,739
    
    
    $
    601,535
    
    
    $
    513,774General
Partner; wholly-owned subsidiary of Consumers Energy Company
    
    
    
    
    
    
    
    
    
    Purchases under gas transportation agreements
    
    
    9,354
    
    
    
    9,349
    
    
    
    14,294Purchases under spot gas agreements
    
    
    
    
    
    
    
    
    
    
    663Purchases under gas supply agreements
    
    
    
    
    
    
    
    
    
    
    2,330Gas storage agreement
    
    
    2,563
    
    
    
    2,563
    
    
    
    2,563Land lease/easement agreements
    
    
    600
    
    
    
    600
    
    
    
    600Accounts receivable
    
    
    26,365
    
    
    
    50,364
    
    
    
    40,373Accounts payable
    
    
    1,053
    
    
    
    1,031
    
    
    
    1,025Sales under spot gas agreements
    
    
    
    
    
    
    
    
    
    
    3,260El Paso
Corporation
    
    $
    (5,121
    )
    
    
    18.1
    %Source
Midland Limited Partnership (SMLP) General Partner; owned by subsidiaries of El Paso Corporation
    
    
    
    
    
    
    
    
    
    Purchase under gas transportation agreements
    
    
    12,002
    
    
    
    12,334
    
    
    
    13,023Purchases under spot gas agreement
    
    
    
    
    
    
    
    
    
    
    610Purchases under gas supply agreement
    
    
    132,887
    
    
    
    70,000
    
    
    
    54,308Gas agency agreement
    
    
    136
    
    
    
    264
    
    
    
    238Deferred reservation charges under gas purchase agreement
    
    
    1,576
    
    
    
    3,152
    
    
    
    4,728Accounts payable
    
    
    14,924
    
    
    
    10,997
    
    
    
    5,751Sales under spot gas agreements
    
    
    
    
    
    
    
    
    
    
    3,474Gas supplier funds on deposit
    
    
    44,353
    
    
    
    
    
    
    
    Letter of credit provided to MCV
    
    
    385,700
    
    
    
    184,000
    
    
    
    El Paso Midland, Inc. (El Paso Midland)
    
    
    (3,073
    )
    
    
    10.9
    
    
    See related party activity listed under SMLP.General Partner; wholly-owned subsidiary
of El Paso CorporationMEI Limited Partnership (MEI)
    
    
    
    
    
    
    
    
    
    See related party activity listed under SMLP.A General and Limited Partner;
50% interest owned by El Paso Midland, Inc.
and 50% interest owned by SMLPGeneral Partnership Interest
    
    
    (2,560
    )
    
    
    9.1Limited Partnership Interest
    
    
    (256
    )
    
    
    .9Micogen Limited Partnership
    
    
    (1,280
    )
    
    
    4.5
    
    
    See related party activity listed under SMLP.(MLP) Limited Partner, owned
subsidiaries of El Paso CorporationTotal El Paso Corporation
    
    $
    (12,290
    )
    
    
    43.5
    %The Dow
Chemical CompanyThe Dow
Chemical Company Limited
    
    $
    13,107
    
    
    
    75
    %
    
    Steam and electric power agreement
    
    
    42,873
    
    
    
    39,055
    
    
    
    36,207PartnerSteam purchase agreement - Dow Corning Corp (affiliate)
    
    
    4,368
    
    
    
    4,289
    
    
    
    4,017Purchases under demineralized water supply agreement
    
    
    6,671
    
    
    
    8,142
    
    
    
    6,396Accounts receivable
    
    
    4,148
    
    
    
    4,003
    
    
    
    3,431Accounts payable
    
    
    674
    
    
    
    744
    
    
    
    610Standby and backup fees
    
    
    821
    
    
    
    766
    
    
    
    731Alanna
CorporationAlanna Corporation
    
    $
    1
    (1)
    
    
    .00001
    %
    
    Note receivable
    
    
    1
    
    
    
    1
    
    
    
    1Limited Partner; wholly-owned subsidiary
of Alanna Holdings CorporationTOTAL PARTNERS EQUITY
    
    $
    1,602
    
    
    
    100.0
    %
 Footnotes to Partners Equity and Related Party Transactions
 
 (1)
    
    Alannas capital stock is pledged to secure MCVs obligation under the lease and other overall lease transaction documents. F-25




---



##### Table of Contents



F-26




---



##### Table of Contents



MIDLAND COGENERATION VENTURELIMITED PARTNERSHIPDate: February 22, 2006
    
    By:
    
    /s/ James M. Kevra

James M. KevraPresident and Chief Executive Officer
  Signature
    
    Title
    
    Date/s/ James M. Kevra

James M. Kevra
    
    President and Chief Executive Officer
(Principal Executive Officer)
    
    February 22, 2006/s/ James M. Rajewski

James M. Rajewski
    
    Chief Financial Officer,
Vice President and Controller
(Principal Accounting Officer)
    
    February 22, 2006/s/ Thomas W. Elward

Thomas W. Elward
    
    Chairman, Management Committee
    
    February 22, 2006/s/ Stephen R. McKemy

Stephen R. McKemy
    
    Member, Management Committee
    
    February 22, 2006
 F-27




---



##### Table of Contents



ExhibitNumber
    
    
    
    Description3.1
    
    
    
    Restated Certificate of Limited Partnership dated June 13, 1988 ((a), Exhibit 3.1)).3.2
    
    
    
    Amended and Restated Limited Partnership Agreement of MCV dated as of June 13, 1988 ((a) (Exhibit 3.2)).3.2 (a)
    
    
    
    Amendment No. 1 dated as of May 26, 1989 to Amended and Restated Limited Partnership Agreement ((a)
(Exhibit 3.3)).3.2 (b)
    
    
    
    Amendment No. 2 dated as of November 28, 1989 to Amended and Restated Limited Partnership Agreement ((a),
Exhibit 3.4)).3.2 (c)
    
    
    
    Amendment No. 3 dated as of June 1, 1990 to Amended and Restated Limited Partnership Agreement
(incorporated by reference to Exhibit (2)(b) to CMS Energy Corporations Form 10-K dated March 21, 1990,
File No. 1-9513).3.3
    
    
    
    Memorandum of Agreement, dated March 2, 1990, relating to Amended and Restated Partnership Agreement
((a), (Exhibit 3.6)).4.1
    
    
    
    Senior Trust Indenture, Leasehold Mortgage and Security Agreement dated as of June 1, 1990 between
Shawmut Bank and United States Trust Company of New York ((a), Exhibit 4.1)).4.1 (a)
    
    
    
    Senior Trust Indenture Supplement No. 1 dated as of June 1, 1990 ((a), (Exhibit 4.2)).4.2
    
    
    
    Subordinated Trust Indenture, Leasehold Mortgage and Security Agreement dated as of June 1, 1990 between
Shawmut Bank and Meridian Trust Company (Subordinated Trust Indenture) ((a), (Exhibit 4.5)).4.2 (a)
    
    
    
    Subordinated Trust Indenture Supplement No. 1 dated as of June 1, 1990 ((a), (Exhibit 4.6)).4.2 (b)
    
    
    
    Subordinated Trust Indenture Supplement No. 2 dated as of July 1, 1990 ((a), (Exhibit 4.7)).4.3
    
    
    
    Collateral Trust Indenture dated as of June 1, 1990 among Midland Funding Corporation I, MCV and United
States Trust Company of New York (incorporated by reference to Exhibit No. (28)(b) to CMS Energy
Corporations Form 10-Q for the quarter ended June 30, 1990, File No. 1-9513).4.3 (a)
    
    
    
    Collateral Trust Indenture Supplement No. 1 dated June 1, 1990 ((a), (Exhibit 4.4)).4.4
    
    
    
    Collateral Trust Indenture dated as of June 1, 1990 among Midland Funding Corporation II, MCV and
Meridian Trust Company (incorporated by reference to Exhibit No. (28)(d) to CMS Energy Corporations Form
10-Q for the quarter ended June 30, 1990, File No. 1-9513).4.4 (a)
    
    
    
    Collateral Trust Indenture Supplement No. 1 dated June 1, 1990 ((a), (Exhibit 4.9)).4.5
    
    
    
    Amended and Restated Trust Agreement dated as of March 1, 1990 between Shawmut Bank and Owner Participant
((a), (Exhibit 4.10)).4.6
    
    
    
    Lease Agreement, dated as of March 1, 1990 between MCV and Shawmut Bank ((a), (Exhibit 4.11)).4.6 (a)
    
    
    
    Amended and Restated Lease Agreement dated as of June 1, 1990 between MCV and Shawmut Bank ((a), (Exhibit
4.12)).4.6 (b)
    
    
    
    Amendment No. 1 dated as of January 1, 1992 to Amended and Restated Lease Agreement ((d), (Exhibit 4.17)).
 E-1




---



##### Table of Contents



ExhibitNumber
    
    
    
    Description4.6 (c)
    
    
    
    Second Amended and Restated Agreement of Lease [Part A] dated as of June 1, 1990 among Consumers, MCV,
CMS Midland, Inc. and MEC Development Corporation ((a), (Exhibit 4.14)).4.7
    
    
    
    Amended and Restated Participation Agreement dated as of June 1, 1990 among MCV, Owner Participant,
Shawmut Bank, United States Trust Company, Meridian Trust Company, Midland Funding Corporation I, Midland
Funding Corporation II, MDC and Institutional Senior Bond Purchasers ((a), (Exhibit 4.13)).4.8
    
    
    
    Ground Lease Assignment and Assumption Agreement dated as of June 1, 1990 among Shawmut Bank and MCV
((a), (Exhibit 4.15)).4.9
    
    
    
    Collateral Agency and Intercreditor Agreement dated as of June 1, 1990 between Shawmut Bank, MCV, United
States Trust Company, Meridian Trust Company, Bank of Montreal and Manufacturers National Bank of Detroit
((a), (Exhibit 4.16)).10.1
    
    
    
    Tax Exempt Collateral Trust Indenture dated as of July 1, 1990 among The Economic Development Corporation
of the County of Midland, MCV and Meridian Trust Company (incorporated by reference to Exhibit No.
(28)(g) to CMS Energy Corporations Form 10-Q for the quarter ended June 30, 1990, File No. 1-9513).10.1 (a)
    
    
    
    Tax Exempt Collateral Trust Indenture Supplement No. 1 dated July 1, 1990 ((a), (Exhibit 10.2)).10.2
    
    
    
    Credit Agreement dated as of June 16, 1990 among Bank of Montreal as Agent, the Lenders named therein and
MCV ((a), (Exhibit 10.3)), as amended.10.3
    
    
    
    CMS Transfer Agreement dated as of January 27, 1987, as amended as of June 13, 1988, among Consumers
Power Company, CMS Midland, Inc. and MCV (incorporated by reference to Exhibit (19)(a) to Consumers Power
Companys Form 10-Q for the quarter ended June 30, 1988, File No. 1-5611).10.4
    
    
    
    Amended and Restated MDC Transfer Agreement dated as of June 13, 1988, among Consumers Power Company, MEC
Development Corporation and MCV, as amended by the March 2, 1990 Memorandum of Agreement with respect to
the Amended and Restated Partnership Agreement (incorporated by reference to Exhibit No. (19)(b) to
Consumers Power Companys Form 10-Q for the quarter ended June 30, 1988, File No. 1-5611), as amended by
the March 2, 1990 Memorandum of Agreement with respect to the Amended and Restated MDC Transfer Agreement
(incorporated by reference to Exhibit (2)(b) to CMS Energy Corporations Form 8-K dated March 21, 1990,
File No. 1-9513).10.5
    
    
    
    Amended and Restated Tax Indemnification Agreement, dated as of June 1, 1990, among MCV and Owner
Participant ((a), (Exhibit 10.70)).10.6
    
    
    
    Capacity Support Agreement dated as of June 9, 1988, between CMS Energy Corporation and MCV (incorporated
by reference to Exhibit No. 10(m) to CMS Energy Corporations Annual Report on Form 10-K, for the year
ended December 31, 1988, File No. 1-9513).10.7
    
    
    
    Registration Rights Agreement dated as of December 17, 1993 among Midland Funding Corporation I, MCV,
Consumers and Morgan Stanley & Co. Incorporated and Donaldson, Lufkin & Jearette Securities Corporation
((e), (Exhibit 10.97)).10.8
    
    
    
    Power Purchase Agreement, dated as of July 17, 1986, between MCV and Consumers Power Company (PPA)
((a), (Exhibit 10.4)).10.8 (a)
    
    
    
    Amendment No. 1 to PPA dated September 10, 1987 ((a), (Exhibit 10.5)).
 E-2




---



##### Table of Contents



ExhibitNumber
    
    
    
    Description10.8 (b)
    
    
    
    Amendment No. 2 to PPA dated March 18, 1988 ((a), (Exhibit 10.6)).10.8 (c)
    
    
    
    Amendment No. 3 to PPA dated August 28, 1989 ((a), (Exhibit 10.7)).10.8 (d)
    
    
    
    Amendment No. 4A to PPA dated May 25, 1989 ((a), (Exhibit 10.8)).10.9
    
    
    
    Settlement Agreement dated April 5, 1999, between MCV and Consumers Energy Company ((j), (Exhibit 10.1)).10.10
    
    
    
    Special Facilities/Interconnection Agreement dated as of July 8, 1988 between MCV and Consumers Power
Company ((a), (Exhibit 10.25)).10.11
    
    
    
    Residual Open Access Interconnection Service Purchase Agreement between Consumers Power Company and MCV,
dated December 5, 1991 ((c), (Exhibit 10.83)).10.12
    
    
    
    Agreement with respect to the transmission of power dated as of June 9, 1988, between Consumers Power
Company and MCV ((a), (Exhibit 10.69)).10.13
    
    
    
    MCV Backup Agreement dated June 9, 1988 between MCV and Consumers Power Company with respect to
Alternative Generating Equipment ((a), (Exhibit 10.27)).10.14
    
    
    
    Interconnection Option between MCV, Consumers Power Company, Michigan Gas Storage Company and The Dow
Chemical Company dated April 27, 1988 ((a), (Exhibit 10.14)).10.15
    
    
    
    Resource Conservation Agreement, dated February 12, 2004, between MCV and Consumers Energy Company ((q),
(Exhibit 10.15)).10.16
    
    
    
    Reduced Dispatch Agreement, dated July 7, 2004, between MCV and Consumers Energy Company ((q), (Exhibit
10.15)).10.17
    
    
    
    Steam and Electric Power Agreement between The Dow Chemical Company and MCV dated January 27, 1987 (the
SEPA) ((a), (Exhibit 10.10)).10.17 (a)
    
    
    
    First Amendment to SEPA ((a), (Exhibit 10.11)).10.17 (b)
    
    
    
    Exhibit A to SEPA ((a), (Exhibit 10.13)).10.17 (c)
    
    
    
    Fourth Amendment to SEPA ((a), (Exhibit 10.15)).10.17 (d)
    
    
    
    Fifth Amendment to SEPA ((a), (Exhibit 10.16)).10.17 (e)
    
    
    
    Sixth Amendment to SEPA, dated November 20, 1989 ((f), (Exhibit 10.14(e))).10.17 (f)
    
    
    
    Seventh Amendment to SEPA, dated November 22, 1994 ((f), (Exhibit 10.14(f))).10.18
    
    
    
    Demineralized Water Supply Agreement dated as of January 27, 1987 between MCV and The Dow Chemical
Company ((a), (Exhibit 10.31)).10.19
    
    
    
    Package Boiler Sale and Support Agreement between The Dow Chemical Company, Consumers Power Company and
MCV dated as of January 27, 1987 ((a), (Exhibit 10.32)).10.20
    
    
    
    Equipment Lease dated as of January 27, 1987 between The Dow Chemical Company and MCV (the Equipment
Lease) ((a), (Exhibit 10.71)).
 E-3




---



##### Table of Contents



ExhibitNumber
    
    
    
    Description10.20 (a)
    
    
    
    First Amendment to Equipment Lease effective March 1, 1988 and dated as of May 4, 1988 ((a), (Exhibit
10.72)).10.20 (b)
    
    
    
    Second Amendment to Equipment Lease effective December 1, 1989 and dated November 20, 1989 ((a), (Exhibit
10.73)).10.21
    
    
    
    Equipment Lease Easement dated as of January 27, 1988 between The Dow Chemical Company and MCV ((a),
(Exhibit 10.74)).10.21 (a)
    
    
    
    First Amendment to Equipment Lease Easement effective March 1, 1988 and dated May 4, 1988 ((a), (Exhibit
10.75)).10.21 (b)
    
    
    
    Second Amendment to Equipment Lease Easement effective December 1, 1989 and dated November 20, 1989 ((a),
(Exhibit 10.76)).10.22
    
    
    
    Service Agreement dated as of June 9, 1988 between MCV and ABB Alstom Power, Inc. (Previously ABB Energy
Services, Inc.) ((a), (Exhibit 10.22)).10.22 (a)
    
    
    
    Hot Gas Path Parts Addendum to the Service Agreement dated March 22, 1994 ((e), (Exhibit 10.99)).10.22 (b)
    
    
    
    Amendment No. 1 to the Service Agreement dated April 1, 1995 ((g), (Exhibit 10.20(b))).10.22 (c)
    
    
    
    Amendment No. 2 to the Service Agreement dated January 15, 1998 ((h), (Exhibit 10.19 (c))).10.23
    
    
    
    Operating Agreement, dated as of June 1, 1990, between MCV and Shawmut Bank, as Owner Trustee ((a),
(Exhibit 10.23)).10.24
    
    
    
    Lessee Mortgage and Security Agreement, dated as of June 1, 1990, between Shawmut Bank, as Owner Trustee,
and MCV ((a), (Exhibit 10.24)).10.25
    
    
    
    Cogeneration Agreements Assignment, dated as of June 1, 1990, between Shawmut Bank, Owner Trustee, and
MCV ((a), (Exhibit 10.26)).10.26
    
    
    
    Support Facilities License and Easement Agreement dated as of June 1, 1990 between MCV and Shawmut Bank
((a), (Exhibit 10.29)).10.27
    
    
    
    Facility Agreements and Governmental Actions Assignment Agreement dated as of June 1, 1990 between MCV
and Shawmut Bank ((a), (Exhibit 10.30)).10.28
    
    
    
    Development Agreement, dated as of June 1, 1990 between MCV, Shawmut Bank, as Owner Trustee, and MCV2
((a), (Exhibit 10.33)).10.29
    
    
    
    Amended and Restated Consent and Agreement, dated as of June 1, 1990, between The Dow Chemical Company,
Shawmut Bank, as Owner Trustee, Meridian Trust Company and United States Trust Company, MCV and Consumers
Power Company ((a), (Exhibit 10.34)).10.30
    
    
    
    Consent and Agreement, dated as of June 1, 1990, between Consumers Power Company, MCV, Shawmut Bank, as
Owner Trustee, Meridian Trust Company and United States Trust Company ((a), (Exhibit 10.35)).10.31
    
    
    
    Natural Gas Purchase Agreement, dated as of May 1, 1989 between Northern Michigan Gas Exploration Company
(Nomeco), CMS Energy Corporation and MCV ((a), (Exhibit 10.39)).
 E-4




---



##### Table of Contents



ExhibitNumber
    
    
    
    Description10.31 (a)
    
    
    
    Amendment dated March 1, 1992 to the Natural Gas Purchase Agreement dated as of May 1, 1989 between
Nomeco, CMS Energy Corporation and MCV ((e), (Exhibit 10.95)).10.31 (b)
    
    
    
    Amendment dated May 11, 1994 to the Natural Gas Purchase Agreement dated as of May 1, 1989 between
Nomeco, CMS Energy and MCV,((f), (Exhibit 10.29(b)).10.32
    
    
    
    Natural Gas Purchase Agreement, dated as of May 13, 1988 between ANR Production Company and MCV ((a),
(Exhibit 10.41)).10.33
    
    
    
    Natural Gas Purchase Contract dated August 18, 1994, between Coastal Gas Marketing and MCV ((f), (Exhibit
10.32)).10.34
    
    
    
    Natural Gas Purchase Agreement, dated May 1, 1989 between CoEnergy Trading Company (previously Northern
Michigan Gas Exploration Company before being assigned to CoEnergy Trading Company on March 14, 1995) and
MCV ((a), (Exhibit 10.40)).10.35
    
    
    
    Natural Gas Purchase Agreement, dated February 1, 1992 between CoEnergy Trading Company (previously
Nomeco Oil and Gas Company before being assigned to CoEnergy Trading Company on July 22, 1994) and MCV
((d), (Exhibit 10.84)).10.36
    
    
    
    Natural Gas Purchase Agreement, dated as of June 2, 1997 between MCV and CMS Marketing, Services and
Trading Company ((h), (Exhibit 10.33)).10.37
    
    
    
    Gas Sales Agreement, dated July 1, 1999, between MCV and CMS Marketing Services and Trading Company ((k),
(Exhibit 10.0)).10.38
    
    
    
    Gas Sales Agreement, dated November 15, 1998, between MCV and Engage Energy US, L.P. ((l), (Exhibit
10.37)).10.39
    
    
    
    Gas Sales Agreement, dated September 20, 1999, between MCV and Engage Energy US, L.P. ((l), (Exhibit
10.38)).10.40
    
    
    
    Long Term Gas Agreement, dated September 1, 2000, between MCV and Coastal Merchant Energy, L.P. ((m),
(Exhibit 10.39)).10.41
    
    
    
    Long Term Gas Agreement, dated October 10, 2000, between MCV and El Paso Merchant Energy Gas, L.P., as
amended ((m), (Exhibit 10.40)).10.42
    
    
    
    Long Term Gas Agreement, dated October 10, 2000, between MCV and CMS Marketing, Services and Trading
Company ((m), (Exhibit 10.41)).10.43
    
    
    
    Long Term Gas Agreement, dated October 5, 2001, between MCV and El Paso Merchant Energy, L.P. ((n),
(Exhibit 10.42)).10.44
    
    
    
    Long Term Gas Agreement, dated October 5, 2001, between MCV and CMS Marketing, Services and Trading
Company ((n), (Exhibit 10.43)).10.45
    
    
    
    Transportation Service Agreement, dated as of May 25, 1988 between Great Lakes Gas Transmission Company
and MCV and letter agreements dated May 25, 1988 and May 26, 1988 ((a), (Exhibit 10.60)).10.46
    
    
    
    Transportation Agreement (#17800) dated November 24, 1993 between ANR Pipeline Company and MCV ((f),
(Exhibit 10.35)).
 E-5




---



##### Table of Contents



ExhibitNumber
    
    
    
    Description10.47
    
    
    
    Transportation Agreement (#17850) dated November 24, 1993 between ANR Pipeline Company and MCV ((f),
(Exhibit 10.36)).10.48
    
    
    
    Gas Transportation Agreement (Firm Service), dated as of March 2, 1988, between Michigan Gas Storage and
MCV and amendment thereto dated September 21, 1988 and March 28, 2002. ((a), (Exhibit 10.64)).10.49
    
    
    
    Transportation Agreement (Firm Contract #011456), dated as of May 1, 1993 between Panhandle Eastern
Pipeline Company and MCV, as amended ((e), (Exhibit 10.90)).10.50
    
    
    
    Transportation Agreement (Firm Contract #011457), dated as of May 1, 1993 between Panhandle Eastern
Pipeline Company and MCV, as amended ((e), (Exhibit 10.91)).10.51
    
    
    
    Transportation Agreement (Firm Contract #011458), dated as of May 1, 1993 between Panhandle Eastern
Pipeline Company and MCV, as amended ((e), (Exhibit 10.92)).10.52
    
    
    
    Firm Transportation Service Form of Transportation Agreement (#013296), dated November 1, 1993 between
Trunkline Gas Company and MCV ((e), (Exhibit 10.93)).10.53
    
    
    
    Gas Exchange Agreement (Firm Service), dated as of March 2, 1988, between Consumers Power Company and
MCV, as amended September 21, 1988 ((a), (Exhibit 10.63)).10.54
    
    
    
    Gas Storage Agreement (Firm Service) between MCV and Consumers Power Company dated March 2, 1988 ((a),
(Exhibit 10.68)).10.55
    
    
    
    The Gas Supply Option dated as of January 27, 1987, between The Dow Chemical Company and MCV ((a),
(Exhibit 10.67)).10.56
    
    
    
    Master Netting, Setoff and Security Agreement dated December 2, 2002, between El Paso Merchant Energy,
L.P. and MCV ((o), (Exhibit 10.55)).10.57
    
    
    
    Maintenance Services and Parts Agreement for MCV 11NM Gas Turbines Between MCV and General Electric
International, Inc., dated December 31, 2002, ((o), (Exhibit 10.56)), (**).10.57 (a)
    
    
    
    Maintenance Services and Parts Agreement for MCV 11NM Gas Turbines Between MCV and General Electric
International, Inc., Guaranty Agreement dated January 22, 2003, ((p), (Exhibit 10.55 (a))).10.57 (b)
    
    
    
    Maintenance Services and Parts Agreement for MCV 11NM Gas Turbines Between MCV and General Electric
International, Inc., Amendment One dated March 21, 2003, ((p), (Exhibit 10.55 (b))).10.58
    
    
    
    MCV Senior Management Incentive Plan ((p), (Exhibit 10.58)), (*).10.59
    
    
    
    MCV Supplemental Retirement Plan dated July 6, 1992 ((d), (Exhibit 10.87)), (*).10.60
    
    
    
    MCV Supplemental Benefit Plan dated January 1, 1989 ((d), (Exhibit 10.88)), (*).10.61
    
    
    
    MCV Excess  Benefit Plan dated July 1, 1989 ((d), (Exhibit 10.89)), (*).21
    
    
    
    Subsidiaries of Registrant  MCV subsidiaries are in the aggregate not significant subsidiaries as defined in Rule 1-02 (v) of
Regulation S-X.31.1
    
    
    
    Certification of President and Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 E-6




---



##### Table of Contents



ExhibitNumber
    
    
    
    Description31.2
    
    
    
    Certification of Chief Financial Officer, Vice President and Controller Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    
    
    Certification of President and Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    
    
    Certification of Chief Financial Officer, Vice President and Controller Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 (a)
    
    Incorporated by reference to MCVs registration statement on Form S-1 (File No.
33-37977) as the bracketed numbered exhibits.(b)
    
    Incorporated by reference to MCVs registration statement on Form S-1 (File No.
33-37977) originally filed on November 23, 1990, as amended, in Amendment No. 1 to
File No. 33-37977 as the bracketed numbered exhibits.(c)
    
    Incorporated by reference to MCVs Annual Report on Form 10-K for the year ended
December 31, 1991 as the bracketed numbered exhibits.(d)
    
    Incorporated by reference to MCVs Annual Report on Form 10-K for the year ended
December 31, 1992 as the bracketed numbered exhibits.(e)
    
    Incorporated by reference to MCVs Annual Report on Form 10-K for the year ended
December 31, 1993 as the bracketed numbered exhibits.(f)
    
    Incorporated by reference to MCVs Annual Report on Form 10-K for the year ended
December 31, 1994 as the bracketed numbered exhibits.(g)
    
    Incorporated by reference to MCVs Annual Report on Form 10-K for the year ended
December 31, 1995 as the bracketed numbered exhibits.(h)
    
    Incorporated by reference to MCVs Annual Report on Form 10-K for the year ended
December 31, 1997 as the bracketed numbered exhibits.(i)
    
    Incorporated by reference to MCVs Annual Report on Form 10-K for the year ended
December 31, 1998 as the bracketed numbered exhibits.(j)
    
    Incorporated by reference to MCVs Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 1999 as the bracketed numbered exhibits.(k)
    
    Incorporated by reference to MCVs Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 1999 as the bracketed numbered exhibits.(l)
    
    Incorporated by reference to MCVs Annual Report on Form 10-K for the year ended
December 31, 1999 as the bracketed numbered exhibits.(m)
    
    Incorporated by reference to MCVs Annual Report on Form 10-K for the year ended
December 31, 2000 as the bracketed numbered exhibits.(n)
    
    Incorporated by reference to MCVs Annual Report on Form 10-K for the year ended
December 31, 2001 as the bracketed numbered exhibits.(o)
    
    Incorporated by reference to MCVs Annual Report on Form 10-K for the year ended
December 31, 2002 as the bracketed numbered exhibits. E-7




---



##### Table of Contents



ExhibitNumber
    
    
    
    Description
 (p)
    
    Incorporated by reference to MCVs Annual Report on Form 10-K for the year ended
December 31, 2003 as the bracketed number exhibits.(q)
    
    Incorporated by reference to MCVs Annual Report on Form 10-K for the year ended
December 31, 2004 as the bracketed number exhibits.(*)
    
    Exhibits represent Management Contracts and Compensatory Plans and Arrangements.(**)
    
    Pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, confidential
treatment for portions of this exhibit has been made, which portions have been
omitted from the exhibit and have been filed separately with the Securities and
Exchange Commission.
 E-8