CMS ENERGY CORP 10-Q form for quarterly period ended 2024-03-31, page 30: Certain of CMS Energy's and Consumers' credit agreements contain covenants that require CMS Energy and Consumers to maintain certain financial ratios, as defined therein. At March 31, 2024, no default had occurred with respect to any financial covenants contained in CMS Energy's and Consumers' credit agreements. CMS Energy and Consumers were each in compliance with these covenants as of March 31, 2024, as presented in the following table:

|    |                         |               |             |
|---:|:------------------------|:--------------|:------------|
|  1 |                         | Limit         | Actual      |
|  2 | CMS Energy, parent only |               |             |
|  3 | Debt to Capital         | < 0.70 to 1.0 | 0.57 to 1.0 |
|  4 | Consumers               |               |             |
|  5 | Debt to Capital         | < 0.65 to 1.0 | 0.50 to 1.0 |

Applies to CMS Energy's revolving credit agreement and letter of credit reimbursement agreement.
Applies to Consumers' revolving credit agreements.

Outlook

Several business trends and uncertainties may affect CMS Energy's and Consumers' financial condition and results of operations. These trends and uncertainties could have a material impact on CMS Energy's and Consumers' consolidated income, cash flows, or financial position. For additional details regarding these and other uncertainties, see Forward-looking Statements and Information; Notes to the Unaudited Consolidated Financial Statements-Note 1, Regulatory Matters and Note 2, Contingencies and Commitments; and Part II-Item 1A. Risk Factors.

Consumers Electric Utility Outlook and Uncertainties

Clean Energy Plan: Consumers' Clean Energy Plan details its strategy to meet customers' long-term energy needs and provides the foundation for its goal to achieve net-zero carbon emissions from its electric business by 2040. Under this net-zero goal, Consumers plans to eliminate the impact of carbon emissions created by the electricity it generates or purchases for customers. Additionally, through its Clean Energy Plan, Consumers continues to make progress on expanding its customer programs, namely its demand response, energy efficiency, and conservation voltage reduction programs, as well as increasing its renewable energy generation.
The Clean Energy Plan was most recently revised and approved by the MPSC in 2022. Under this plan, Consumers will eliminate the use of coal-fueled generation in 2025 and expects to meet 90 percent of its customers' needs with clean energy sources by 2040. Specifically, the Clean Energy Plan provides for:
•the retirement of the D.E. Karn coal-fueled generating units, totaling 515 MW of nameplate capacity; these units closed in June 2023
•the retirement of the J.H. Campbell coal-fueled generating units, totaling 1,407 MW of nameplate capacity, in 2025
•the retirement of the D.E. Karn oil and gas-fueled generating units, totaling 1,219 MW of nameplate capacity, in 2031 
The MPSC authorized Consumers to issue securitization bonds to finance the recovery of and return on the D.E. Karn coal-fueled generating units; Consumers issued these bonds in December 2023. Additionally, the MPSC has authorized regulatory asset treatment for Consumers to recover the remaining book value of the J.H. Campbell coal-fueled generating units, as well as a 9.0‑percent return on equity, commencing in 2025.
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, CMS ENERGY CORP 10-Q form for quarterly period ended 2024-03-31, page 31: 
Under the Clean Energy Plan, Consumers:


•purchased the Covert Generating Station, a natural gas-fueled generating facility with 1,200 MW of nameplate capacity in Van Buren County, Michigan in May 2023

•conducted a one‑time competitive solicitation for up to 700 MW of capacity through PPAs from sources able to deliver to Michigan's Lower Peninsula beginning in 2025 (including up to 500 MW from dispatchable sources)
These actions are expected to help Consumers continue to provide controllable sources of electricity to customers while expanding its investment in renewable energy. The Clean Energy Plan forecasts renewable energy capacity levels of 30 percent in 2025, 43 percent in 2030, and 61 percent in 2040, including the addition of nearly 8,000 MW of solar generation. Additionally, Consumers plans to deploy battery storage beginning in 2024, with 75 MW of energy storage expected by 2027 and an additional 475 MW by 2040. The 2023 Energy Law, enacted in November 2023, set more ambitious standards for renewable energy and energy storage. Consumers is required to file updates to its amended renewable energy plan before or in November 2024 and its Clean Energy Plan before or in 2027. Together, these updated plans will outline a path to meeting these accelerated timelines.
Under its Clean Energy Plan, Consumers bids new capacity competitively and expects to own and operate approximately 50 percent of new capacity, with the remainder being built and owned by third parties. Additionally, Consumers earns a return equal to its pre-tax weighted-average cost of capital on permanent capital structure on payments made under new competitively bid PPAs with non‑affiliated entities approved by the MPSC.
As a result of requests for proposals, Consumers has entered into PPAs to purchase renewable capacity, energy, and RECs from solar generating facilities and build transfer agreements to purchase solar generating facilities. Presented in the following illustration is the aggregate renewable capacity that Consumers expects to add to its portfolio as a result of these agreements:
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Question: How does CMS Energy Corp finance its clean energy investments in the quarter ended March 31, 2024?
Answer: Consumers Energy finances its clean energy investments through a combination of regulatory-approved mechanisms and strategic acquisitions. The company leverages securitization bonds to recover costs associated with retiring coal-fueled generating units. For instance, it issued bonds in December 2023 to finance the recovery of the D.E. Karn coal units. Additionally, the MPSC has authorized the use of regulatory asset treatment for recovering the remaining book value of the J.H. Campbell units, providing a 9.0% return on equity starting in 2025.

To further expand its clean energy portfolio, Consumers has purchased the Covert Generating Station and conducted a competitive solicitation process to secure up to 700 MW of capacity through Power Purchase Agreements (PPAs), including dispatchable sources. These steps, combined with plans to increase renewable energy capacity and deploy battery storage, highlight a well-structured approach to financing its transition towards net-zero carbon emissions.