<PAGE>
FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ___________________ to ____________________
Commission file number 1-9513
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
212 West Michigan Avenue
Jackson, Michigan 49201
(Full title of the Plan and address of the Plan, if
different from that of the issuer named below)
CMS ENERGY CORPORATION
Fairlane Plaza South, Suite 1100
330 Town Center Drive
Dearborn, Michigan 48126
(Name of Issuer of the Securities held
pursuant to the Plan and the address
of its principal executive office)
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND 1995
TOGETHER WITH AUDITORS' REPORT
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Employees' Savings & Incentive Plan of Consumers Energy Company:
We have audited the accompanying statements of financial position of the
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF CONSUMERS ENERGY COMPANY (the
"Plan") as of December 31, 1996 and 1995, and the related statements of
changes in members' equity for each of the three years in the period ended
December 31, 1996. These financial statements and the schedules referred
to below are the responsibility of the Plan administrator. Our
responsibility is to express an opinion on these financial statements and
schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by the Plan administrator, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Plan as of
December 31, 1996 and 1995, and the changes in members' equity for each of
the three years in the period ended December 31, 1996, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of
assets held for investment purposes as of December 31, 1996 and reportable
transactions for the year ended December 31, 1996 are presented for
purposes of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. The fund
information in the statement of financial position and the statement of
changes in members' equity is presented for purposes of additional
analysis rather than to present the statement of financial position and
statement of changes in members' equity of each fund. The supplemental
schedules and fund information have been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in
our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Detroit, Michigan,
May 28, 1997.
<PAGE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
INDEX TO FINANCIAL
STATEMENTS AND SCHEDULES
STATEMENTS OF CHANGES IN MEMBERS' EQUITY FOR EACH OF THE THREE YEARS IN
THE PERIOD ENDED DECEMBER 31, 1996
STATEMENTS OF FINANCIAL POSITION AS OF DECEMBER 31, 1996 AND 1995
NOTES TO FINANCIAL STATEMENTS
SCHEDULE I - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF
DECEMBER 31, 1996
SCHEDULE II - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
EXHIBIT A - CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
<PAGE>
<TABLE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
STATEMENTS OF CHANGES IN MEMBERS' EQUITY
(Continued on Following Page)
<CAPTION>
For the Year Ended December 31, 1996
Total Fund A Fund B Fund C
<S> <C> <C> <C> <C>
MEMBERS'EQUITY-
BEGINNING OF PERIOD $392,990,758 $ 97,817,526 $100,622,058 $157,707,920
------------ ------------ ------------ ------------
CHANGES DURING PERIOD:
Members' contributions
(Note 1) 34,758,408 10,122,157 16,170,021 2,518,449
Employers' contributions
(Note 1) 17,070,684 - - 17,070,684
Reallocation of Members'
contributions (Note 1) - (2,320,711) (563,626) (9,658,589)
Interfund transfers - (1,498,849) (254,103) (1,942,153)
------------ ------------ ------------ ------------
51,829,092 6,302,597 15,352,292 7,988,391
------------ ------------ ------------ ------------
Investment income 14,306,964 6,249,786 2,699,058 5,346,122
Interest income 1,464,552 - - -
Income from short-term
investments 649,794 359,066 113,244 37,599
Gain (loss) on securities
sold or distributed
(Note 2) 17,273,666 (67,895) 14,303,154 1,679,666
Change in unrealized
appreciation (depreciation)
of investments (Note 2) 23,818,783 527 4,009,484 18,199,135
------------ ------------ ------------ ------------
57,513,759 6,541,484 21,124,940 25,262,522
------------ ------------ ------------ ------------
Distribution to Members (23,304,501) (7,499,954) (6,225,168) (8,261,479)
------------ ------------ ------------ ------------
Net change during period 86,038,350 5,344,127 30,252,064 24,989,434
------------ ------------ ------------ ------------
MEMBERS' EQUITY -
END OF PERIOD $479,029,108 $103,161,653 $130,874,122 $182,697,354
============ ============ ============ ============
Number of units 8,709,667 6,438,786 27,428,329
============ ============ ============
Value per unit $11.8445 $20.3259 $6.6609
============ ============ ============
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
STATEMENTS OF CHANGES IN MEMBERS' EQUITY
(Continued from Preceding Page)
<CAPTION>
For the Year Ended December 31, 1996
Fund D Fund E Fund F Fund G
<S> <C> <C> <C> <C>
MEMBERS' EQUITY -
BEGINNING OF PERIOD $ 19,934,467 $ 9,757,131 $ 5,564,128 $ 1,587,528
------------- ------------- ------------- -------------
CHANGES DURING PERIOD:
Members' contributions
(Note 1) - 3,467,787 1,991,215 488,779
Employers' contributions
(Note 1) - - - -
Reallocation of Members'
contributions (Note 1) - 7,188,580 5,103,638 250,708
Interfund transfers 2,887,018 455,419 267,389 85,279
------------- ------------- ------------- -------------
2,887,018 11,111,786 7,362,242 824,766
------------- ------------- ------------- -------------
Investment income - - 9,720 2,278
Interest income 1,464,552 - - -
Income from short-term
investments - 10,239 6,760 122,886
Gain (loss) on securities
sold or distributed
(Note 2) - 1,358,737 - 4
Change in unrealized
appreciation (depreciation)
of investments (Note 2) - 636,810 1,013,605 (40,778)
------------- ------------- ------------- -------------
1,464,552 2,005,786 1,030,085 84,390
------------- ------------- ------------- -------------
Distribution to Members - (782,210) (390,108) (145,582)
------------- ------------- ------------- -------------
Net change during period 4,351,570 12,335,362 8,002,219 763,574
------------- ------------- ------------- -------------
MEMBERS' EQUITY -
END OF PERIOD $ 24,286,037 $ 22,092,493 $ 13,566,347 $ 2,351,102
============= ============= ============= =============
Number of units 14,714,595 10,414,022 2,152,827
============= ============= =============
Value per unit $1.5014 $1.3027 $1.0921
============= ============= =============
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
STATEMENTS OF CHANGES IN MEMBERS' EQUITY
(Continued on Following Page)
<CAPTION>
For the Year Ended December 31, 1995
Total Fund A Fund B Fund C
<S> <C> <C> <C> <C>
MEMBERS' EQUITY -
BEGINNING OF PERIOD $278,895,087 $87,616,045 $ 64,543,489 $110,588,248
------------- ------------- ------------- -------------
CHANGES DURING PERIOD:
Members' contributions
(Note 1) 34,525,422 12,475,089 15,387,333 3,265,244
Employers' contributions
(Note 1) 17,499,632 - - 17,499,632
Reallocation of Members'
contributions (Note 1) - (2,847,126) (1,826,916) (7,155,652)
Interfund transfers - (1,583,281) (68,487) (1,151,219)
------------- ------------- ------------- -------------
52,025,054 8,044,682 13,491,930 12,458,005
------------- ------------- ------------- -------------
Investment income 12,147,348 5,681,022 2,109,719 4,338,195
Interest income 1,132,930 - - -
Income from short-term
investments 630,798 443,781 115,202 54,142
Gain (loss) on securities
sold or distributed
(Note 2) 7,572,294 - 7,150,555 18,576
Change in unrealized
appreciation (depreciation)
of investments (Note 2) 52,276,848 159,946 16,181,758 34,627,256
------------- ------------- ------------- -------------
73,760,218 6,284,749 25,557,234 39,038,169
------------- ------------- ------------- -------------
Distribution to Members (11,689,601) (4,127,950) (2,970,595) (4,376,502)
------------- ------------- ------------- -------------
Net change during period 114,095,671 10,201,481 36,078,569 47,119,672
------------- ------------- ------------- -------------
MEMBERS' EQUITY -
END OF PERIOD $392,990,758 $97,817,526 $100,622,058 $157,707,920
============= ============= ============= =============
Number of units 8,826,534 5,941,832 26,373,553
============= ============= =============
Value per unit $11.0822 $16.9345 $5.7191
============= ============= =============
<FN>
The accompanying notes are an integral part of these statements.
<PAGE>
<PAGE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
STATEMENTS OF CHANGES IN MEMBERS' EQUITY
(Continued from Preceding Page)
<CAPTION>
For the Year Ended December 31, 1995
Fund D Fund E Fund F Fund G
<S> <C> <C> <C> <C>
MEMBERS' EQUITY -
BEGINNING OF PERIOD $16,147,305 $ - $ - $ -
------------- ------------- ------------- -------------
CHANGES DURING PERIOD:
Members' contributions
(Note 1) 189,603 1,841,146 1,266,831 100,176
Employers' contributions
(Note 1) - - - -
Reallocation of Members'
contributions (Note 1) - 6,618,912 3,807,805 1,402,977
Interfund transfers 2,464,629 161,329 160,438 16,591
------------- ------------- ------------- -------------
2,654,232 8,621,387 5,235,074 1,519,744
------------- ------------- ------------- -------------
Investment income - - 1,668 16,744
Interest income 1,132,930 - - -
Income from short-term
investments - 9,154 7,780 739
Gain (loss) on securities
sold or distributed
(Note 2) - 403,163 - -
Change in unrealized
appreciation (depreciation)
of investments (Note 2) - 856,566 400,992 50,330
------------- ------------- ------------- -------------
1,132,930 1,268,883 410,440 67,813
------------- ------------- ------------- -------------
Distribution to Members - (133,139) (81,386) (29)
------------- ------------- ------------- -------------
Net change during period 3,787,162 9,757,131 5,564,128 1,587,528
------------- ------------- ------------- -------------
MEMBERS' EQUITY -
END OF PERIOD $19,934,467 $ 9,757,131 $ 5,564,128 $ 1,587,528
============= ============= ============= =============
Number of units 7,556,543 4,854,040 1,515,197
============= ============= =============
Value per unit $1.2912 $1.1463 $1.0477
============= ============= =============
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
STATEMENTS OF CHANGES IN MEMBERS' EQUITY
<CAPTION>
For the Year Ended December 31, 1994
Total Fund A Fund B Fund C Fund D
<S> <C> <C> <C> <C> <C>
MEMBERS' EQUITY -
BEGINNING OF PERIOD $239,822,886 $76,631,260 $50,130,198 $ 99,954,547 $13,106,881
------------- ------------ ------------ ------------- ------------
CHANGES DURING PERIOD:
Members' contributions
(Note 1) 28,918,320 11,448,099 14,037,853 3,432,368 -
Employers' contributions
(Note 1) 16,911,526 - - 16,911,526 -
Reallocation of Members'
contributions (Note 1) - (1,591,750) 2,846,568 (1,254,818) -
Interfund transfers - (474,195) (372,307) (1,380,929) 2,227,431
------------- ------------ ------------ ------------- ------------
45,829,846 9,382,154 16,512,114 17,708,147 2,227,431
------------- ------------ ------------ ------------- ------------
Investment income 9,183,935 4,291,096 1,651,539 3,241,300 -
Interest income 812,993 - - - 812,993
Income from short-term
investments 2,272,927 2,180,754 63,482 28,691 -
Gain (loss) on securities
sold or distributed
(Note 2) (1,735,518) (1,018,793) (707,902) (8,823) -
Change in unrealized
appreciation (depreciation)
of investments (Note 2) (10,625,375) (1,210,690) (1,454,395) (7,960,290) -
------------- ------------ ------------ ------------- ------------
(91,038) 4,242,367 (447,276) (4,699,122) 812,993
------------- ------------ ------------ ------------- ------------
Distribution to Members (6,666,607) (2,639,736) (1,651,547) (2,375,324) -
------------- ------------ ------------ ------------- ------------
Net change during period 39,072,201 10,984,785 14,413,291 10,633,701 3,040,424
------------- ------------ ------------ ------------- ------------
MEMBERS' EQUITY -
END OF PERIOD $278,895,087 $87,616,045 $64,543,489 $110,588,248 $16,147,305
============= ============ ============ ============= ============
Number of units 8,451,925 5,262,058 24,682,320
============ ============ =============
Value per unit $10.3665 $12.2662 $4.2232
============ ============ =============
<FN>
The accompanying notes are an integral part of these statements.
/TABLE
<PAGE>
<TABLE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
STATEMENTS OF FINANCIAL POSITION
(Continued on Following Page)
<CAPTION>
December 31, 1996
Total Fund A Fund B Fund C
<S> <C> <C> <C> <C>
ASSETS:
Investments (Note 1) -
Guaranteed investment
contracts (at cost
plus interest earned
thereon) $ 91,044,886 $ 91,044,886 $ - $ -
Common stock of corpora-
tions other than CMS
Energy (cost $106,350,560
in 1996 and $80,208,320
in 1995) 129,079,125 - 129,079,125 -
Common stock of CMS Energy
(cost $107,248,940 in
1996 and $100,690,825
in 1995) 175,902,631 - - 175,902,631
Loans to Members (at cost
which approximates
market) 24,218,458 - - -
Nicholas-Applegate Core
Growth Institutional
Portfolio (cost $20,066,900
in 1996 and $8,353,163 in
1995) 21,559,997 - - -
Smith Barney International
Equity Collective Trust
(cost $11,350,503 in 1996
and $4,426,633 in 1995) 12,767,104 - - -
Class G Common Stock of CMS
Energy (cost $2,298,662
in 1996 and $1,446,458
in 1995) 2,308,212 - - -
Short-term investments (at
cost which approximates
market) 12,171,604 10,652,397 684,724 486,759
------------- ------------- ------------- -------------
Total Investments 469,052,017 101,697,283 129,763,849 176,389,390
------------- ------------- ------------- -------------
Other Assets -
Current receivables from
Employers 6,582,570 - - 6,582,570
Current receivables from
Members 2,912,458 1,431,367 769,906 (231,310)
Interest and dividends
receivable 482,063 48,367 296,977 2,575
------------- ------------- ------------- -------------
Total Other Assets 9,977,091 1,479,734 1,066,883 6,353,835
------------- ------------- ------------- -------------
Total Assets 479,029,108 103,177,017 130,830,732 182,743,225
------------- ------------- ------------- -------------
Accrued interfund transfers, net - (15,364) 43,390 (45,871)
------------- ------------- ------------- -------------
MEMBERS' EQUITY $479,029,108 $103,161,653 $130,874,122 $182,697,354
============= ============= ============= =============
<FN>
The accompanying notes are an integral part of these statements.
/TABLE
<PAGE>
<TABLE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
STATEMENTS OF FINANCIAL POSITION
(Continued from Preceding Page)
<CAPTION>
December 31, 1996
Fund D Fund E Fund F Fund G
<S> <C> <C> <C> <C>
ASSETS:
Investments (Note 1) -
Guaranteed investment
contracts (at cost
plus interest earned
thereon) $ - $ - $ - $ -
Common stock of corpora-
tions other than CMS
Energy (cost $106,350,559
in 1996 and $80,208,320
in 1995) - - - -
Common stock of CMS Energy
(cost $107,248,940 in
1996 and $100,690,825
in 1995) - - - -
Loans to Members (at cost
which approximates
market) 24,218,458 - - -
Nicholas-Applegate Core
Growth Institutional
Portfolio (cost $20,066,900
in 1996 and $8,353,163 in
1995) - 21,559,997 - -
Smith Barney International
Equity Collective Trust
(cost $11,350,503 in 1996
and $4,426,633 in 1995) - - 12,767,104 -
Class G Common Stock of CMS
Energy (cost $2,298,662
in 1996 and $1,446,458
in 1995) - - - 2,308,212
Short-term investments (at
cost which approximates
market) - 32,071 300,131 15,522
------------- ------------- ------------- -------------
Total Investments 24,218,458 21,592,068 13,067,235 2,323,734
------------- ------------- ------------- -------------
Other Assets -
Current receivables from
Employers - - - -
Current receivables from
Members - 454,214 467,187 21,094
Interest and dividends
receivable 132,505 1,002 493 144
------------- ------------- ------------- -------------
Total Other Assets 132,505 455,216 467,680 21,238
------------- ------------- ------------- -------------
Total Assets 24,350,963 22,047,284 13,534,915 2,344,972
------------- ------------- ------------- -------------
Accrued interfund transfers, net (64,926) 45,209 31,432 6,130
------------- ------------- ------------- -------------
MEMBERS' EQUITY $ 24,286,037 $ 22,092,493 $ 13,566,347 $ 2,351,102
============= ============= ============= =============
<FN>
The accompanying notes are an integral part of these statements.
/TABLE
<PAGE>
<TABLE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
STATEMENTS OF FINANCIAL POSITION
(Continued on Following Page)
<CAPTION>
December 31, 1995
Total Fund A Fund B Fund C
<S> <C> <C> <C> <C>
ASSETS:
Investments (Note 1) -
Guaranteed investment
contracts (at cost
plus interest earned
thereon) $ 91,039,865 $91,039,865 $ - $ -
Common stock of corpora-
tions other than CMS
Energy (cost $80,208,320
in 1995) 98,930,128 - 98,930,128 -
Common stock of CMS Energy
(cost $100,690,825 in
1995) 151,155,132 - - 151,155,132
Loans to Members (at cost
which approximates
market) 19,890,760 - - -
Nicholas-Applegate Core
Growth Institutional
Portfolio (cost $8,353,163
in 1995) 9,209,756 - - -
Smith Barney International
Equity Collective Trust
(cost $4,426,633 in 1995) 4,829,629 - - -
Class G Common Stock of CMS
Energy (cost $1,446,458
in 1995) 1,496,788 - - -
Short-term investments (at
cost which approximates
market) 7,432,526 6,582,026 313,049 110,085
------------- ------------- ------------- -------------
Total Investments 383,984,584 97,621,891 99,243,177 151,265,217
------------- ------------- ------------- -------------
Other Assets -
Current receivables from
Employers 7,505,091 - - 7,505,091
Current receivables from
Members 3,094,557 1,090,548 1,429,891 (350,560)
Interest and dividends
receivable 398,370 38,138 251,374 2,623
------------- ------------- ------------- -------------
Total Other Assets 10,998,018 1,128,686 1,681,265 7,157,154
------------- ------------- ------------- -------------
Total Assets 394,982,602 98,750,577 100,924,442 158,422,371
------------- ------------- ------------- -------------
LIABILITIES:
Accrued interfund transfers, net - (5,899) 75,163 (67,236)
Other (1,991,844) (927,152) (377,547) (647,215)
------------- ------------- ------------- -------------
Total Liabilities (1,991,844) (933,051) (302,384) (714,451)
------------- ------------- ------------- -------------
MEMBERS' EQUITY $392,990,758 $97,817,526 $100,622,058 $157,707,920
============= ============= ============= =============
<FN>
The accompanying notes are an integral part of these statements.
/TABLE
<PAGE>
<TABLE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
STATEMENTS OF FINANCIAL POSITION
(Continued from Preceding Page)
<CAPTION>
December 31, 1995
Fund D Fund E Fund F Fund G
<S> <C> <C> <C> <C>
ASSETS:
Investments (Note 1) -
Guaranteed investment
contracts (at cost
plus interest earned
thereon) $ - $ - $ - $ -
Common stock of corpora-
tions other than CMS
Energy (cost $80,208,320
in 1995) - - - -
Common stock of CMS Energy
(cost $100,690,825 in
1995) - - - -
Loans to Members (at cost
which approximates
market) 19,890,760 - - -
Nicholas-Applegate Core
Growth Institutional
Portfolio (cost $8,353,163
in 1995) - 9,209,756 - -
Smith Barney International
Equity Collective Trust
(cost $4,426,633 in 1995) - - 4,829,629 -
Class G Common Stock of CMS
Energy (cost $1,446,458
in 1995) - - - 1,496,788
Short-term investments (at
cost which approximates
market) - 45,902 380,695 769
------------- ------------- ------------- -------------
Total Investments 19,890,760 9,255,658 5,210,324 1,497,557
------------- ------------- ------------- -------------
Other Assets -
Current receivables from
Employers - - - -
Current receivables from
Members - 494,320 347,365 82,993
Interest and dividends
receivable 104,878 803 441 113
------------- ------------- ------------- -------------
Total Other Assets 104,878 495,123 347,806 83,106
------------- ------------- ------------- -------------
Total Assets 19,995,638 9,750,781 5,558,130 1,580,663
------------- ------------- ------------- -------------
LIABILITIES:
Accrued interfund transfers, net (61,171) 33,664 18,614 6,865
Other - (27,314) (12,616) -
------------- ------------- ------------- -------------
Total Liabilities (61,171) 6,350 5,998 6,865
------------- ------------- ------------- -------------
MEMBERS' EQUITY $ 19,934,467 $ 9,757,131 $ 5,564,128 $ 1,587,528
============= ============= ============= =============
<FN>
The accompanying notes are an integral part of these statements.
/TABLE
<PAGE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
NOTES TO FINANCIAL STATEMENTS
(1) PLAN DESCRIPTION
General
The Employees' Savings & Incentive Plan of Consumers Energy Company (the
"Plan") is an employee benefit plan in which participant contributions are
supplemented by contributions from the Company/Employer (Consumers Energy
Company, its wholly owned subsidiaries, CMS NOMECO Oil & Gas Co., and
other CMS Energy companies). Mr. T. A. McNish, Vice-President, Secretary
and Assistant Treasurer of Consumers Energy Company, is the Plan
Administrator. The information provided below is only a summary of the
Plan's provisions. Reference should be made to the Plan documents for
more complete information.
Trustee
The Plan's funds are held in trust for the benefit of members covered by
the Plan under the Trust Agreement with NBD Bank (the "Trustee").
Eligibility
To be eligible to participate in the Plan, an employee must be a regular
employee.
Contributions
Each employee electing to participate in the Plan ("Member") contributes
by payroll deductions not less than 1% nor more than 16% of his
compensation. Each Member may change the amount of his contributions at
any time by giving his Employer advance notice in writing. The change
will be effective as soon as feasible. A Member may discontinue
contributions as of any pay date upon notice to his Employer. However, if
he discontinues contributions without simultaneously making an election
for Elective Employer Contributions, he may not resume making
contributions for three months.
A Member can choose an "Elective Employer Contribution" option, which
allows the Member to reduce his salary by as much as 12% and have this
amount contributed by the Employer to the Plan. If a Member's regular
annual salary is equal to or more than $66,000, the most that can be
contributed by the Employer on behalf of the Member to the Plan is 9%.
Members' earnings related to such contributions are not currently taxable.
Each Employer contributes a Matching Employer Contribution equal to 50% of
certain contributions by each of its participating employees. Such
Employer contributions are limited to not more than 3% of each Member's
compensation. The contributions of Members and the Employers are
transferred monthly to the Trustee.
<PAGE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
NOTES TO FINANCIAL STATEMENTS
(Continued)
(1) PLAN DESCRIPTION (Continued)
Each Employer may contribute an Incentive Contribution which is determined
at the end of each year based on (1) earnings and (2) comparison of the
Company's gas and electric rates with those of other major investor-owned
utilities. The overall goal will be based 70% on earnings and 30% on
energy rates.
The Incentive Contribution will be based on the Member's net Elective
Employer and Participant Contributions of up to 6% of each Member's
compensation.
The Plan Administrator may exclude Incentive Contributions to the accounts
of certain officers of Employers.
Matching Employer and Incentive Contributions vest as follows: 10% for
each of the first four years of service with the Employer, and 20% for
each of the next three years of service. Member contributions are fully
vested at all times.
Member Loans
Members may borrow from the Plan up to 50% of their account balance, not
exceeding $50,000, including the vested portion of the Matching Employer
Contributions, for extraordinary or emergency needs as defined in the Plan
and at the discretion of the Plan Administrator. Loan transactions are
treated as a transfer to (from) the investment fund from (to) the
Participant's loan fund (Fund D). Loan terms range from one to five
years* and are secured by the balance in the Participant's account.**
Repayments of principal and interest are made primarily through payroll
deduction.
Plan-Related Expenses
The Company pays expenses relating to the administration of the Plan.
Brokerage fees, commissions, stock transfer taxes and other expenses in
connection with the purchases, sales and distributions of securities for
each investment fund are charged to the fund that incurred the cost.
*(Up to ten years for purchase of a principal residence.)
**A new loan rate is determined by subtracting one full percentage point
from the current major New York bank prime rate. The rate on new loans
taken during 1996 was 7.25 percent.
<PAGE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
NOTES TO FINANCIAL STATEMENTS
(Continued)
(1) PLAN DESCRIPTION (Continued)
Fund Investments
Fund A - The investments in this fund consist of guaranteed investment
contracts with the Allstate Life Insurance Company, Chicago,
Illinois; New York Life Insurance Company, New York, New
York; Principal Mutual Life Insurance Co, Des Moines, Iowa;
and Prudential Asset Management Company, Chicago, Illinois;
and cash, temporary investments of any type or cash
equivalents as the Trustee shall deem necessary or advisable
to maintain as part of this fund within the limitations
specified in the Trust Agreement.
Fund B - The investments in this fund may consist of common stocks and
securities convertible into common stock (other than
securities of CMS Energy Corporation) selected by the
Investment Manager, Independence Investment Associates, Inc.,
Boston, Massachusetts, in its sole discretion, and such
amounts of cash, temporary investments of any type or cash
equivalents as the Investment Manager shall deem necessary or
advisable to maintain as part of the fund within the
limitations specified in the Trust Agreement.
Fund C - The investments in this fund may consist of common stock of
CMS Energy Corporation and such amounts of cash, temporary
investments of any type or cash equivalents as the Trustee
shall deem necessary or advisable to maintain as part of this
fund within the limitations specified in the Trust Agreement;
subject to the limitation that the total number of shares
held at any time by this fund, shall not exceed 10% of the
outstanding voting shares of CMS Energy Corporation.
Employers' contributions must be invested in this fund.
Fund D - The investments in this fund consist of the promissory notes
of Plan Members.
Fund E - The investments in this fund may consist of mid-cap growth-
oriented common stock (other than securities of CMS Energy
Corporation) selected by the Investment Manager, Nicholas-
Applegate Capital Management, San Diego, California, in its
sole discretion, and such amounts of cash, temporary
investments of any type or cash equivalents as the Investment
Manager shall deem necessary or advisable to maintain as part
of the fund within the limitations specified in the Trust
Agreement.
<PAGE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
NOTES TO FINANCIAL STATEMENTS
(Continued)
(1) PLAN DESCRIPTION (Continued)
Fund F - The investments in this fund may consist of international
common stock selected by the Investment Manager, Smith Barney
Capital Management, New York, New York, in its sole
discretion, and such amounts of cash, temporary investments
of any type or cash equivalents as the Investment Manager
shall deem necessary or advisable to maintain as part of the
fund within the limitations specified in the Trust Agreement.
Fund G - The investments in this fund may consist of Class G common
stock of CMS Energy Corporation and such amounts of cash,
temporary investments of any type or cash equivalents as the
Trustee shall deem necessary or advisable to maintain as part
of this fund within the limitations specified in the Trust
Agreement; subject to the limitation that the total number of
shares held at any time by this fund shall not exceed 10% of
the outstanding Class G voting shares of CMS Energy
Corporation.
Reallocations
All or part of a Member's past contributions which are in the Member's
account on a Valuation Date may be reallocated among Fund A, Fund B, Fund
C, Fund E, Fund F or Fund G on a Valuation Date by giving his employer
advance notice in writing of such change. Any such reallocations of
contributions will be done on the basis of the value of the contributions
on such Valuation Date.
Forfeitures
The Plan provides that Members who receive a distribution, under certain
conditions, forfeit all or a portion of the value of any Matching Employer
and Incentive Contributions credited to their accounts. Such amounts
forfeited totalled $253,000 in 1996 and are treated as a reduction of the
Employers' contribution liability.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Valuations
The accompanying financial statements reflect the accrual basis of
accounting. Investments, other than short-term, in Funds B, C, E, F and G
are stated at current market value. Market value for most Fund B, C, E, F
and G common stock is defined as the closing price of such stock as shown
in a composite report of one or more generally recognized exchanges,
including the New York Stock Exchange. There are also some securities
which are traded in the over-the-counter ("OTC") market. OTC issues are
priced at the bid price or "last" price furnished by the NASDAQ National
Market. Short-term investments
<PAGE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
NOTES TO FINANCIAL STATEMENTS
(Continued)
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
held in Funds A, B, C, E, F and G are stated at cost which approximates
market.
Gains and Losses
Amounts relating to gain (loss) on securities sold or distributed and
change in unrealized appreciation (depreciation) as reported in the
statement of changes in members' equity for the years ended December 31,
1996, 1995 and 1994 have been presented in conformity with the Department
of Labor reporting requirements. Department of Labor rules require that
realized gains (losses) and unrealized appreciation (depreciation) be
based on the market value of the assets at the beginning of the Plan year
or at the time of purchase during the year.
Guaranteed Investment Contracts
The Plan has entered into several fully benefit-responsive investment
contracts with various insurance companies. All of these contracts are
held in Fund A and are credited with interest and charged for Plan
withdrawals and administrative expenses. The contracts are included in
the financial statements at contract value (cost plus accrued interest
less withdrawals) which approximates fair value. The contracts earn
interest at fixed rates ranging from 5.65% to 8.05% and mature between
September 1997 and November 2001. The average aggregate yield for these
contracts was 7.11% and 7.03% in 1996 and 1995, respectively.
Estimates
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
(3) FEDERAL INCOME TAX ASPECTS OF THE PLAN
The last determination letter received by the Company from the Internal
Revenue Service was dated November 20, 1996. The determination letter
states that the Plan qualifies under Section 401(a) of the Internal
Revenue Code (the "Code") of 1954 as amended by the "Employee Retirement
Income Security Act of 1974" ("ERISA") and is exempt from taxation under
Section 501(a) of the Code. Under existing Federal income tax laws, (a)
the Company is entitled to deduct its contributions to the Plan in
computing its Federal income tax; (b) the income of the trust funds
accumulated under the Plan is exempt from Federal
income tax; and (c) Members are not subject to tax on amounts contributed
by
<PAGE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) FEDERAL INCOME TAX ASPECTS OF THE PLAN (Continued)
the Company for their benefit until such time as such amounts are
distributed to them, at which time they are taxable as ordinary income
unless distributed as an "eligible rollover distribution."
(4) RECONCILIATION OF THE FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of members' equity and distributions
paid to members per the financial statements to members' equity and
distributions paid to members per the Form 5500 for the Plan year 1996:
<TABLE>
<CAPTION>
Total Fund A Fund B Fund C Fund D Fund E Fund F Fund G
------------ ------------ ------------ ------------ ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Members'
Equity per
Financial
Statements $479,029,108 $103,161,653 $130,874,122 $182,697,354 $24,286,037 $22,092,493 $13,566,347 $2,351,102
Benefits
Payable
to Members $ 1,025,239 $ 215,428 $ 380,161 $ 386,482 - $ 22,144 $ 20,213 $ 811
------------ ------------ ------------ ------------ ----------- ----------- ----------- ----------
Members'
Equity
per Form
5500 $478,003,869 $102,946,225 $130,493,961 $182,310,872 $24,286,037 $22,070,349 $13,546,134 $2,350,291
============ ============ ============ ============ =========== =========== =========== ==========
Distributions
paid to
members per
financial
statements $ 23,304,501 $ 7,499,954 $ 6,225,168 $ 8,261,479 $ - $ 782,210 $ 390,108 $ 145,582
Benefits
payable
to members 1,025,239 215,428 380,161 386,482 - 22,144 20,213 811
------------ ------------ ------------ ------------ ----------- ----------- ----------- ----------
Distributions
paid per
Form 5500 $ 24,329,740 $ 7,715,328 $ 6,605,329 $ 8,647,961 $ - $ 804,354 $ 410,321 $ 146,393
============ ============ ============ ============ =========== =========== =========== ==========
</TABLE>
(5) PLAN TERMINATION
The Employers expect the Plan to be permanent, but since future conditions
affecting the Plan cannot be anticipated or foreseen, the Employers
reserve the right, by action of the Board of Directors of Consumers Energy
Company, to terminate or amend the Plan in whole or in part.
Upon termination or partial termination of the Plan, or upon a complete
discontinuance of contributions, the interest of each person in the Plan
shall be segregated and set aside by the Trustee and one hundred percent
(100%) of the value of the Matching Employer contribution credited to the
account of a person having an interest in the Plan shall be vested in such
person.
(6) GENDER
Any masculine terminology used herein shall also include the feminine.
<PAGE>
SCHEDULE I
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1996
Current
Identity of Issuer and Title of Issue Cost Value
GUARANTEED INVESTMENT CONTRACTS
(Fund A) -
Allstate Life Insurance Company
(5.72%, matures 09/30/97) $ 9,524,403 $ 9,524,403
Allstate Life Insurance Company
(6.71%, matures 07/28/2000) 4,389,319 4,389,319
Allstate Life Insurance Company
(7.22%, matures 06/14/99) 5,971,880 5,971,880
Allstate Life Insurance Company
(7.33%, matures 06/21/99) 5,980,545 5,980,545
Allstate Life Insurance Company
(7.65%, matures 03/27/2000) 5,695,643 5,695,643
New York Life Insurance Company
(7.45%, matures 03/31/2000) 5,672,488 5,672,488
New York Life Insurance Company
(7.73%, matures 05/11/99) 18,263,503 18,263,503
Principal Mutual Life Insurance
Company (5.65%, matures 10/01/97) 6,331,877 6,331,877
Principal Mutual Life Insurance
Company (6.55%, matures 06/01/2000) 4,422,752 4,422,752
The Prudential Asset Management Company
(6.50%, matures 11/30/2001) 12,895,175 12,895,175
The Prudential Asset Management Company
(8.05%, matures 10/02/2000) 11,897,301 11,897,301
----------- -----------
Total Guaranteed Investment Contracts $91,044,886 $91,044,886
----------- -----------
COMMON STOCK OF CORPORATIONS OTHER THAN
CMS ENERGY CORPORATION (Fund B) -
ABBOTT LABORATORIES CORP $ 1,950,488 $ 2,507,050
ADOBE SYSTEM INC 228,411 209,300
ALBERTSONS INC 571,674 726,750
AMERICAN EXPRESS CO 707,162 1,327,750
AMERICAN INTL GROUP INC 323,587 357,225
AMGEN INC 615,931 598,125
ANADARKO PETROLEUM CORP 437,416 783,475
ANALOG DEVICES INC 415,584 508,125
ANHEUSER BUSCH COS INC 238,285 272,000
AT&T CORPORATION 3,867,105 4,107,613
ATLANTIC RICHFIELD COMPANY 1,624,937 1,735,750
AVERY DENNISON CORP 450,605 580,150
BAKER HUGHES INC 122,577 213,900
BANC ONE CORPORATION 397,396 417,100
BANKAMERICA CORPORATION 489,699 897,750
<PAGE>
SCHEDULE I
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1996
(Continued)
Current
Identity of Issuer and Title of Issue Cost Value
BECTON DICKINSON & COMPANY $ 606,888 $ 624,600
BELLSOUTH CORPORATION 694,450 769,500
BOEING COMPANY 986,530 1,288,650
BRISTOL MYERS SQUIBB CO 1,732,638 2,626,900
BRITISH STEEL PLC 242,510 266,750
CANADIAN PACIFIC LTD 779,470 797,650
CHASE MANHATTAN CORP 898,668 1,680,250
CHEVRON CORP 1,143,504 1,280,500
CHRYSLER CORPORATION 1,282,888 1,428,900
CIGNA CORP 2,044,855 2,705,175
COLUMBIA/HCA HEALTHCARE 621,334 766,100
COMPAQ COMPUTER CORP 623,071 981,750
COMPUTER ASSOC INTL INC 802,611 641,775
CONAGRA INC 711,721 840,775
CONSOLIDATED NATURAL GAS CO 547,141 613,275
COOPER INDUSTRIES INC 126,864 134,800
CSX CORPORATION 999,796 891,475
DANA CORPORATION 455,599 531,788
DAYTON HUDSON CORPORATION 568,819 718,275
DEAN WITTER DISCOVER 1,226,359 1,649,625
DELL COMPUTER CORPORATION 283,999 308,125
DOVER CORPORATION 717,481 888,800
DRESSER INDUSTRIES INC 118,080 124,000
DU PONT, E I DE NEMOURS & CO 2,862,094 2,936,700
DURIRON CO INC 253,388 257,688
EASTMAN KODAK COMPANY 810,400 1,227,825
ENTERGY CORPORATION 1,803,614 1,834,300
FEDERATED DEPARTMENT STORES 522,455 573,300
FIRST BANK SYSTEM INC 610,948 805,350
FLEET FINANCIAL GROUP INC 482,276 658,350
FORD MOTOR COMPANY 1,135,127 1,012,650
FRUIT OF THE LOOM INC 234,475 340,875
GENERAL ELECTRIC COMPANY 1,309,726 3,133,878
GENERAL INSTRUMENT CORP 200,532 176,175
GENERAL MOTORS CORPORATION 1,340,409 1,471,800
GENERAL RE CORPORATION 2,739,111 2,965,700
GILLETTE COMPANY 1,056,991 1,135,150
GLAXO WELLCOME 315,159 295,275
GTE CORP 2,425,524 3,003,825
HEALTHSOUTH CORP 640,328 645,038
HERCULES INC 854,645 916,900
HFS INC 1,054,400 1,009,775
HILTON HOTELS CORPORATION 862,593 779,625
HOME DEPOT INC 1,823,203 2,070,163
HONEYWELL INC 427,133 479,975
IMATION CORPORATION 298,179 267,188
<PAGE>
SCHEDULE I
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1996
(Continued)
Current
Identity of Issuer and Title of Issue Cost Value
IMPERIAL OIL LTD $ 501,205 $ 700,300
INFORMIX CORP 268,683 236,350
INGERSOLL-RAND COMPANY 517,129 507,300
INTEL CORPORATION 1,624,309 2,972,270
INTL BUSINESS MACHINES CORP 1,674,903 2,121,000
ITT CORPORATION 990,276 750,388
ITT HARTFORD GROUP INC 1,529,212 1,674,000
JOHNSON & JOHNSON 1,419,977 2,751,175
KERR MC GEE CORPORATION 798,107 914,400
KIMBERLY CLARK CORPORATION 1,736,916 1,905,000
KOMAG INC 322,275 292,950
LIZ CLAIBORNE INC 247,065 301,275
LOCKHEED MARTIN CORPORATION 627,977 1,193,435
LOWE'S COMPANIES INC 642,082 716,063
LUCENT TECHNOLOGY INC 1,503,091 1,313,038
MALLINCKRODT GROUP INC 281,443 330,938
MARSH & MCLENNAN COMPANIES 2,269,203 2,641,600
MC DONNELL DOUGLAS CORP 267,684 334,688
MENTOR GRAPHICS CORP 287,621 153,075
MERCK & COMPANY INC 893,536 1,831,375
MINNESOTA MINING & MFG 766,891 1,012,600
MONSANTO COMPANY 864,907 1,146,813
MORTON INTERNATIONAL INC 503,234 757,950
NATIONSBANK CORPORATION 1,087,259 1,290,300
NEWPORT NEWS SHIPBUILDING 32,483 37,200
NIKE INC CLASS B 438,515 504,000
NORFOLK SOUTHERN CORP 676,388 677,600
OGDEN CORPORATION 119,972 90,972
PANENERGY CORPORATION 507,178 1,233,000
PARAMETRIC TECHNOLOGY CORP 280,825 272,288
PERKIN ELMER CORPORATION 608,761 653,513
PFIZER INC 388,378 406,700
PHARMACIA & UPJOHN INC 379,446 356,625
PHILIP MORRIS COMPANIES INC 1,384,446 2,621,600
PHILLIPS PETROLEUM COMPANY 2,065,702 2,646,150
PITNEY BOWES INC 1,130,947 1,220,925
PPG INDUSTRIES INC 793,868 858,713
PRICE/COSTCO INCORPORATED 769,170 1,110,525
RAYCHEM CORPORATION 673,116 793,238
REVLON INC, CLASS A 186,138 164,313
SARA LEE CORP 478,330 662,075
SCHERING PLOUGH CORPORATION 277,637 530,950
SMITHKLINE BEECHAM 976,811 992,800
SOUTHERN COMPANY 200,700 203,625
SPRINT CORPORATION 149,504 219,313
STAPLES INC 831,149 742,348
<PAGE>
SCHEDULE I
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1996
(Continued)
Current
Identity of Issuer and Title of Issue Cost Value
TENNECO INC $ 453,014 $ 559,550
TEXACO INC 1,451,445 1,717,188
TEXAS UTILITIES COMPANY 1,452,758 1,462,925
TEXTRON INCORPORATED 837,518 857,675
TOYS R US 1,326,127 1,368,275
TRINITY INDUSTRIES INC 501,012 551,250
UNICOM CORPORATION 816,201 792,050
UNILEVER N V NETHERLANDS NY 1,796,241 1,822,600
UNITED TECHNOLOGIES CORP 2,240,631 2,769,250
UNOCAL CORPORATION 1,606,861 1,898,950
UST INC 977,123 1,120,175
WAL MART STORES INC 1,913,632 1,874,600
WALT DISNEY COMPANY 373,314 362,700
WHITMAN CORP 269,246 402,600
XEROX CORPORATION 642,145 873,575
------------ ------------
TOTAL COMMON STOCK OF CORPORATIONS OTHER
THAN CMS ENERGY CORPORATION (Fund B) $106,350,560 $129,079,125
------------ ------------
*COMMON STOCK OF CMS ENERGY CORPORATION
(Fund C) $107,248,940 $175,902,631
------------ ------------
LOANS TO MEMBERS (Fund D) (Loans mature
during periods ranging from 0-10
years and at interest rates from
5.25% to 8.50% $ 24,218,458 $ 24,218,458
------------ ------------
NICHOLAS-APPLEGATE CORE GROWTH
INSTITUTIONAL PORTFOLIO (Fund E) $ 20,066,900 $ 21,559,997
------------ ------------
SMITH BARNEY INTERNATIONAL EQUITY
COLLECTIVE TRUST (Fund F) $ 11,350,503 $ 12,767,104
------------ ------------
*CLASS G COMMON STOCK OF CMS ENERGY
CORPORATION (Fund G) $ 2,298,662 $ 2,308,212
------------ ------------
*SHORT-TERM INVESTMENTS
NBD MASTER TRUST MONEY MARKET FUND $ 11,895,742 $ 11,895,742
(Funds A, B, C, E, F and G)
------------ ------------
SMITH BARNEY CASH & EQUIVALENTS (Fund F) $ 275,862 $ 275,862
------------ ------------
Total Investments $374,750,512 $469,052,017
============ ============
*Represents Party-in-Interest
<PAGE>
<TABLE>
SCHEDULE II
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF CONSUMERS ENERGY COMPANY
ITEM 27(d) SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<CAPTION>
Current Value
Identity of Party of Asset on
and Number of Purchase Selling Cost of Transaction Net Gain
Description of Asset Transactions Shares Price Price Asset Date (Loss)
- ---------------------- ------------ ----------- ------------ ------------ ------------ ------------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
*NBD Bank, N.A.
Master Trust Money
Market Fund
- Purchases 527 105,203,636 $105,203,636 N/A $105,203,636 $105,203,636 N/A
- Sales 256 96,541,525 N/A $96,541,525 96,541,525 96,541,525 $ -
*Represents Party-in-Interest
</TABLE>
<PAGE>
EXHIBIT A
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference of our report dated May 28, 1997 included in the Employees'
Savings & Incentive Plan of Consumers Energy Company's Annual Report on
Form 11-K for the year ended December 31, 1996, into CMS Energy
Corporation's previously filed Registration Statement File No. 33-29681.
ARTHUR ANDERSEN LLP
Detroit, Michigan,
May 28, 1997
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act
of 1934, CMS Energy Corporation has duly caused this annual report to be
signed by the undersigned thereunto duly authorized.
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF CONSUMERS ENERGY COMPANY
By Thomas A McNish
--------------------------------------
Thomas A McNish
Vice-President and Secretary
Dated: May 28, 1997.
<PAGE>
