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                                                                   EXHIBIT 10(W)



                           ANNUAL MANAGEMENT INCENTIVE
                  COMPENSATION PLAN FOR CMS ENERGY CORPORATION
                              AND ITS SUBSIDIARIES





Effective January 1, 2004
Approved by Committee on February 27, 2004



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                           ANNUAL MANAGEMENT INCENTIVE
              COMPENSATION PLAN FOR CMS ENERGY CORPORATION AND ITS
                                  SUBSIDIARIES



I.       GENERAL PROVISIONS

         1.1      PURPOSE. The purpose of the Annual Management Incentive
                  Compensation Plan ("MIC Plan") is to:


                  (a)      Provide an equitable and competitive level of
                           compensation that will permit CMS Energy Corporation
                           ("Company") and its subsidiaries to attract, retain
                           and motivate certain highly competent Management and
                           Professional Employees.

                  (b)      No payments to Management and Professional Employees
                           in the form of incentive compensation shall be made
                           unless pursuant to a plan approved by the Committee
                           and after express approval of the Committee.

         1.2      EFFECTIVE DATE. The initial effective date of the Plan is
                  January 1, 2004. The Plan as described herein, is amended and
                  restated effective January 1, 2004.

         1.3      DEFINITIONS. As used in this MIC Plan, the following terms
                  have the meaning described below:

                  (a)      "Annual Award" means an annual incentive award
                           granted under the MIC Plan.

                  (b)      "CMS Energy" means CMS Energy Corporation.

                  (c)      "Committee" means the Committee on Organization and
                           Compensation of the Board of Directors of CMS Energy.

                  (d)      "Common Stock" means the common stock of CMS Energy.

                  (e)      "Company" means CMS Energy Corporation.

                  (f)      "Corporate Free Cash Flow" (CFCF) means CMS
                           Consolidated Cash Flow from operating activities,
                           excluding pension contributions and adjusted for GCR
                           Recovery, plus Cash Flow from Investing Activities.

                  (g)      "Disability" means that a participant has terminated
                           employment with the Company or a Subsidiary and is
                           entitled to disability payments under the Pension
                           Plan.

                  (h)      "Earnings Per Share" (EPS) means the amount of
                           ongoing net income per outstanding CMS Energy Share.

                  (i)      "GCR Recovery" means actual/forecast incremental GCR
                           recovery during January and February calculated as
                           actual/forecast GCR cycle billed sales times above
                           budget GCR factor.

                  (j)      "Leave of Absence" for purposes of this MIC Plan
                           means a leave of absence that has been approved by
                           the Plan Administrator.


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                  (k)      "Management and Professional Employee" means an
                           employee of the Company or a Subsidiary in the salary
                           grades specified in the table contained in Article
                           III of the MIC Plan.

                  (l)      "MIC Plan" means the Annual Management Incentive
                           Compensation Plan for CMS Energy Corporation and Its
                           Subsidiaries, as effective January 1, 2004 and any
                           amendments thereto.

                  (m)      "Outside Directors" means directors of CMS Energy who
                           are not employed by CMS Energy or a Subsidiary and
                           satisfy the requirements of an "Outside Director"
                           under Code Section 162(m).

                  (n)      "Pension Plan" means the Pension Plan for Employees
                           of Consumers Energy and Other CMS Energy Companies.

                  (o)      "Performance Year" means the calendar year prior to
                           the year in which an Annual Award is made by the
                           Committee.

                  (p)      "Plan Administrator" means the Sr. Vice President -
                           Human Resources of CMS Energy, under the general
                           direction of the Outside Directors on the Committee.

                  (q)      "Retirement" means that an MIC Plan participant is no
                           longer an active employee and qualifies for a
                           retirement benefit other than a deferred vested
                           retirement benefit under the Pension Plan.

                  (r)      "Subsidiary" means any direct or indirect subsidiary
                           of the Company.

         1.4      ELIGIBILITY. Certain Management and Professional Employees are
                  eligible for participation in the MIC Plan.


         1.5      ADMINISTRATION OF THE PLAN.

                  (a)      The MIC Plan is administered by the Sr. Vice
                           President - Human Resources of CMS Energy under the
                           general direction of the Outside Directors who are
                           members of the Committee.

                  (b)      The Committee, no later than March 30th of the
                           Performance Year, will approve performance goals for
                           the Performance Year.

                  (c)      The Committee, no later than March 30th of the
                           calendar year following the Performance Year, will
                           review for approval proposed Annual Awards for all
                           MIC Plan participants, as recommended by the Chairman
                           and CEO of the Company. All proposed Annual Awards
                           are subject to approval of the Committee. Before the
                           payment of any Annual Awards, the Committee will
                           certify in writing that the performance goals were in
                           fact satisfied in accordance with Code Section
                           162(m).

                  (d)      The Committee reserves the right to modify the
                           performance goals with respect to unforeseeable
                           circumstances or otherwise exercise discretion with
                           respect to proposed Annual Awards as it deems
                           necessary to maintain the spirit and intent of the
                           MIC Plan. The Committee also reserves the right in
                           its discretion to not pay Annual Awards for a
                           Performance Year. All discretionary decisions of the
                           Committee are final.

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II.      CORPORATE PERFORMANCE GOALS

         2.1      IN GENERAL. The composite Plan Performance Factor will depend
                  on corporate performance in two areas: (1) the ongoing net
                  income per outstanding CMS Energy share (EPS); and (2) the
                  Corporate Free Cash Flow of CMS Energy (CFCF). There will be
                  no payout under the Plan unless a composite Plan Performance
                  Factor of at least 75% is achieved. Each Component as well as
                  the composite Plan Performance Factor to be used for payouts
                  will be capped at a maximum of 200%. A table containing the
                  composite Plan Performance Factors shall be created by the
                  Committee for each Performance Year. The table for Performance
                  Year 2004 is set forth below.

                  (a)      EPS COMPONENT. EPS performance shall constitute 40%
                           of the composite Plan Performance Factor. The 100%
                           EPS goal for the 2004 performance year is $.85 per
                           share, and the EPS component shall increase or
                           decrease by 25% for each $.05 per share change in
                           performance. (Mathematical extrapolation shall be
                           used for actual results not shown in the table.)
                           There will be no payout under the plan unless at
                           least $.80 per share is achieved (regardless of CFCF
                           performance).

                  (b)      CFCF COMPONENT. CFCF performance shall constitute 60%
                           of composite Plan Performance Factor. The 100% CFCF
                           goal for the 2004 performance year is $ (100)
                           million, and the CFCF component shall increase or
                           decrease by 25% for each $50 million change in
                           performance. (Mathematical extrapolation shall be
                           used for actual results not shown in the table.)


             COMPOSITE PERFORMANCE FACTORS FOR 2004 PERFORMANCE YEAR

<Table>
<Caption>
              CFCF
           COMPONENT
           (MILLIONS)               $(150)       $(100)       $(50)         $ 0         $50         $100
           ----------               ------       ------       ------       -----        -----      ------
              EPS
           COMPONENT
           ----------               ------       ------       ------       -----        -----      ------
           <S>                      <C>          <C>          <C>          <C>          <C>        <C>

            $ .80                     75%          90%         105%        120%          135%        150%

            $ .85                     85%         100%         115%        130%          145%        160%

            $ .90                     95%         110%         125%        140%          155%        170%

            $ .95                    105%         120%         135%        150%          165%        180%

            $1.00                    115%         130%         145%        160%          175%        190%

            $1.05                    125%         140%         155%        170%          185%        200%
</Table>

         Notes: Mathematical extrapolation shall be used for actual results not
         shown in the table.
         Target Award is Bolded 100% and Maximum Award is Bolded 200%



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III.     ANNUAL AWARD FORMULA

         3.1      ANNUAL AWARDS. Annual Awards for each eligible MIC Plan
                  participant will be based upon a standard award as set forth
                  in the table below. The total amount of an MIC participant
                  Annual Award shall be computed according to the annual award
                  formula set forth in Section 3.2.

<TABLE>
<CAPTION>

                                                                SALARY
                                  POSITION                      GRADE            STANDARD AWARD AMOUNT
                                  --------                      -----            ---------------------
                       <S>                                      <C>              <C>
                       Senior Mangers/Directors                 E-2                    $48,700
                       Senior Managers/Directors                E-1/F                  $36,500
                       Managers/Directors                       13                     $29,200
                       Managers/Directors                       12/E                   $21,900
                       Managers/Directors & Equivalent          11                     $16,400
                       Managers/Directors & Equivalent          D                      $12,300
</TABLE>

         3.2      Annual Awards for MIC participants will be calculated and made
                  as follows:

       INDIVIDUAL AWARD = STANDARD AWARD AMOUNT TIMES PERFORMANCE FACTOR %

IV.      PAYMENT OF ANNUAL AWARDS

         4.1      CASH ANNUAL AWARD. All Annual Awards for a Performance Year
                  will be paid in cash no later than March 31st of the calendar
                  year following the Performance Year provided that they first
                  have been reviewed and approved by the Committee, and provided
                  further that the Annual Award for a particular Performance
                  Year has not been deferred voluntarily pursuant to Section
                  4.3. The amounts required by law to be withheld for income and
                  employment taxes will be deducted from the Annual Award
                  payments. All Annual Awards become the obligation of the
                  company on whose payroll the Employee is enrolled at the time
                  the Committee makes the Annual Award.

         4.2      VOLUNTARY DEFERRED ANNUAL AWARD

                  (a)      The payment of all or one-half of a cash Annual Award
                           may be deferred voluntarily at the election of an
                           individual MIC Plan participant. A separate
                           irrevocable election must be made in the calendar
                           year prior to the beginning of the Performance Year.
                           Any Annual Award made by the Committee after
                           termination of employment of a participant or
                           retirement of a participant is not eligible for a
                           voluntary deferral and will be paid in full in cash
                           in the year in which the Annual Award is made.

                  (b)      A Voluntary Deferred Annual Award may be paid out in
                           a lump sum or in five or ten annual installments
                           beginning in the first January of the calendar year
                           following retirement or termination of employment. If
                           an Annual Award is paid in annual installments, each
                           year the payment will be a fraction of the balance
                           equal to one over the number of annual installments
                           remaining. In the event of the participant's death,
                           all deferred amounts will be paid in total in January
                           of the calendar year following the year of death.

                  (c)      At the time of electing to voluntarily defer payment,
                           the participant must elect whether the sum deferred
                           will be treated by the Company or Subsidiary, as
                           applicable, in accordance with Paragraph I or
                           Paragraph II below.

                           i.       A Voluntary Deferred Annual Award will be
                                    credited with sums in lieu of interest from
                                    the first day of the month following the
                                    month in which the Annual Award is
                                    determined to the date of payment. The
                                    interest accrual rate will be equivalent to
                                    the prime rate of interest as reported in
                                    The Wall Street Journal, compounded

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                                    quarterly as of the first business day of
                                    January, April, July and October of each
                                    year during the deferral period. The prime
                                    rate in effect on the first business day of
                                    January, April, July and October will be the
                                    prime rate (described above) in effect for
                                    that quarterly period.

                           ii.      A Voluntary Deferred Annual Award will be
                                    treated as if it were invested as an
                                    optional cash payment under the CMS Energy
                                    Stock Purchase Plan including the
                                    accumulation of any dividends. The value of
                                    the deferred sum at the time of payment will
                                    be equal to the number of dollars such an
                                    investment would have been worth as measured
                                    by the purchase price of shares of Common
                                    Stock using the average closing price, as
                                    reported in The Wall Street Journal (NYSE -
                                    composite transactions) for the first five
                                    trading days in the December previous to a
                                    January payout.

                           The amount of any Voluntary Deferred Annual Award is
                           to be satisfied from the general corporate funds of
                           the company on whose payroll the MIC Plan participant
                           was enrolled prior to the payout beginning and are
                           subject to the claims of general creditors of that
                           company.

         4.3      PAYMENT IN THE EVENT OF DEATH.

                  (a)      A participant may name the beneficiary of his or her
                           choice on a beneficiary form provided by the Company,
                           and the beneficiary shall receive payment in the
                           event that the Participant dies prior to receipt of
                           either a cash Annual Award, or a Voluntary Deferred
                           Annual Award. If a beneficiary is not named, the
                           payment will be made to the first surviving class as
                           follows:

                            1. Widow or Widower
                            2. Children, per capita
                            3. Parents, per capita
                            4. Brothers and Sisters, per capita
                            5. Estate of the Deceased

                  (b)      A participant may change beneficiaries at any time,
                           and the change will be effective as of the date the
                           participant completes and signs the beneficiary form,
                           whether or not the participant is living at the time
                           the request is received by the Company. However, the
                           Company or the applicable Subsidiary will not be
                           liable for any payments made before receipt of a
                           written request.

V.       CHANGE OF STATUS

         Payments in the event of a change in status will not apply if no awards
         are made for the performance year.

         5.1      PRO-RATA ANNUAL AWARDS. A new MIC participant, whether hired
                  or promoted to the position, or an MIC employee promoted to a
                  higher salary grade during the Performance Year will receive a
                  pro rata Annual Award based on the percentage of the
                  Performance Year in which the employee is in a particular
                  salary grade. An MIC participant whose salary grade has been
                  lowered, but whose employment is not terminated during the
                  Performance Year will receive a pro rata Annual Award based on
                  the percentage of the Performance Year in which the employee
                  is in a particular salary grade.


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         5.2      TERMINATION. An MIC participant whose employment is terminated
                  pursuant to a violation of the Company code of conduct or
                  other corporate policies will not be considered for an Annual
                  Award.

         5.3      RESIGNATION. An MIC participant who resigns during or after a
                  Performance Year will not be eligible for an Annual Award. If
                  the resignation is due to reasons such as a downsizing or
                  reorganization, or the ill health of the employee or ill
                  health in the immediate family, the employee may petition the
                  Committee and may be considered, in the discretion of the
                  Committee, for a pro rata Annual Award. The Committee's
                  decision to approve or deny the request for a pro rata Annual
                  Award shall be final.

         5.4      DEATH, DISABILITY, RETIREMENT, LEAVE OF ABSENCE. An MIC
                  participant whose status as an active employee is changed
                  during the Performance Year due to death, Disability,
                  Retirement, or Leave of Absence will receive a pro rata Annual
                  Award.

VI.      MISCELLANEOUS

         6.1      IMPACT ON BENEFIT PLANS. Payments made under the Plan will be
                  considered as earnings for the Supplemental Executive
                  Retirement Plan (Salary Grades E-1, E-2 and F) but not for
                  purposes of the Employees' Savings Plan, Pension Plan, or
                  other employee benefit programs.

         6.2      IMPACT ON EMPLOYMENT. Neither the adoption of the Plan nor the
                  granting of any Annual Award under the Plan will be deemed to
                  create any right in any individual to be retained or continued
                  in the employment of the Company or any corporation within the
                  Company's control group.

         6.3      TERMINATION OR AMENDMENT OF THE PLAN. The Company at any time
                  may, in writing, terminate or amend the Plan.

         6.4      GOVERNING LAW. The Plan will be governed and construed in
                  accordance with the laws of the State of Michigan.

         6.5      DISPUTE RESOLUTION. Any disputes related to the Plan should
                  first be brought to the Plan Administrator. If that does not
                  result in a mutually agreeable resolution, then the dispute
                  shall be subject to final and binding arbitration before a
                  single arbitrator selected by the parties to be conducted in
                  Jackson, Michigan. The arbitration will be conducted and
                  finished within 90 days of the selection of the arbitrator.
                  The parties shall share equally the cost of the arbitrator and
                  of conducting the arbitration proceeding, but each party shall
                  bear the cost of its own legal counsel and experts and other
                  out-of-pocket expenditures.


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