ITEM 1. BUSINESS
GENERAL
On October 11, 2000, Consumers Funding, LLC ("Consumers Funding") whose sole member is Consumers Energy Company ("Consumers Energy"), was formed as a Delaware limited liability company pursuant to a limited liability company agreement of Consumers Energy. Consumers Energy is an electric and gas utility company and is a wholly owned subsidiary of CMS Energy Corporation.
Consumers Funding was organized for the sole purposes of:
o Purchasing and owning securitization property;
o Issuing one or more series of securitization bonds;
o Pledging its interest in securitization property and other collateral to the trustee under the indenture in order to secure securitization bonds; and
o Performing activities that are necessary, suitable or convenient to accomplish these purposes, including the execution of any interest rate swap agreement or hedging arrangement incident to the issuance of securitization bonds.
Consumers Funding is not authorized to and will not engage in any activities in the nature of selling electricity.
Consumers Funding's assets are limited to the securitization property that was sold to the issuer, the trust funds held by the trustee, the rights of the issuer under the transaction documents, any third party credit enhancement or rights under any interest rate swap agreement and any money distributed to the issuer from the collection account in accordance with the indenture and not distributed to Consumers Energy.
The securitization property represents the irrevocable right to recover an amount sufficient to recover a portion of Consumers Energy's qualified costs, including an amount sufficient to pay the principal of and interest on the series 2001-1 securitization bonds and the expenses associated with the securitization bonds. This amount is to be recovered through a non-bypassable securitization charge, approved by the Michigan Public Service Commission ("MPSC"), payable by all of Consumers Energy's electric customers taking delivery from Consumers Energy or its successor on its MPSC approved rate schedules and under certain special contracts with specific customers.
The securitization bonds represent obligations only of Consumers Funding, and are backed only by the assets of Consumers Funding. The securitization bonds do not represent obligations of Consumers Energy or of any agency or instrumentality of the State of Michigan.
The only material business conducted by Consumers Funding has been the issuance of the securitization bonds and holding of the securitization property.
Consumers Funding has no employees. Under the Servicing Agreement, Consumers Energy, as agent for Consumers Funding, has the following duties:
(i) obtaining meter reads, calculating and billing the Securitization Charges and collecting from customers all Securitization Charge Collections;
(ii) responding to inquiries by Customers, Alternative Electric Suppliers, if any, the MPSC, or any federal, local or other state governmental authority with respect to the Securitization Charges;
(iii) delivering bills or arranging for delivery of bills, accounting for Securitization Charge Collections, investigating and resolving delinquencies, processing and depositing collections, making periodic remittances and furnishing periodic reports, to the Issuer, the Trustee, the Securitization Bondholders, the Securities and Exchange Commission and the Rating Agencies, subject, in the case of processing and depositing collections, making periodic remittances and furnishing periodic reports, to the provisions of the Intercreditor Agreement;
(iv) settling, as the agent for the Issuer, as its interest may appear, defaulted or written off accounts in accordance with the Servicer's usual and customary practices for accounts of its own electric service customers; and
(v) taking action in connection with Securitization Charge Adjustments (see MANAGEMENT'S NARRATIVE AND ANALYSIS).
ITEM 2.
ITEM 2. PROPERTIES
Consumers Funding LLC has no physical property. Its primary asset is the securitization property described in Item 1 above.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
None.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(a) Sales of Unregistered Securities. There is no established public trading market for Consumers Funding's equity securities. Consumers Energy owns all of the Company's equity. On January 22, 2001, Consumers Energy made a $1,000 equity contribution to Consumers Funding. On November 8, 2001, Consumers Energy made a $2.3 million equity investment in Consumers Funding.
(b) Restriction on Dividend. Consumers Funding may not make any payment, distributions or dividends to any member of Consumers Funding with respect to its membership interest in Consumers Energy except in accordance with the Indenture.
(c) Bondholder. As of December 31, 2002, the sole holder of the Securitization Bonds was Cede & Company, as nominee of the Depository Trust. The Securitization Bonds are not registered on any national securities exchange and are not traded on any established trading market.
ITEM 7.
ITEM 7. MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATION
This Management's Narrative Analysis (MNA) of the results of operation of Consumers Funding LLC (Consumers Funding) is an abbreviated format pursuant to Instruction I(1)(a) and (b) of Form 10-K. The MNA refers to Consumers Funding's Notes to Financial Statements and should be read in conjunction with such Financial Statements and Notes.
This Form 10-K and other written and oral statements from Consumers Funding may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to various factors that could cause Consumers Funding's actual results to differ materially from the results anticipated in such statements. Consumers Funding has no obligation to update or revise forward-looking statements regardless of whether new information, future events or any other factors affect the information contained in such statements. Consumers Funding does, however, discuss certain risk factors, uncertainties and assumptions in this MNA, and in various public filings it periodically makes with the Securities and Exchange Commission. Consumers Funding designed this discussion of potential risks and uncertainties, which is by no means comprehensive, to highlight important factors that may impact Consumers Funding's outlook.
Consumers Funding, a Delaware limited liability company, whose sole member is Consumers Energy Company (Consumers), was formed by Consumers on October 11, 2000. Consumers is an electric and gas utility and is a wholly owned subsidiary of CMS Energy Corporation. Consumers Funding was organized for the sole purpose of purchasing and owning securitization property (see below), issuing securitization bonds, pledging its interest in securitization property and other collateral to the trustee to collateralize the securitization bonds, and performing activities that are necessary, suitable or convenient to accomplish these purposes.
On November 8, 2001, Consumers Funding issued $468.6 million of securitization bonds. Consumers Funding used the proceeds from the securitization bond issuance to purchase securitization property from Consumers. As discussed in Note 1 to the Financial Statements, securitization property represents the irrevocable right of Consumers to collect a nonbypassable Securitization Charge (Securitization Charge) from customers in accordance with a financing order issued by the Michigan Public Service Commission (MPSC). In 2002 and the two month period in 2001, the securitization property, which is classified as a securitization receivable, along with earnings on cash deposited with the trustee, resulted in the recording of $22.9 million and $3.4 million of interest income, respectively. Interest expense associated with the securitization bonds also totaled $22.9 million and $3.4 million for the same periods.
Consumers, as servicer, began billing a Securitization Charge to electric customers beginning with its December 2001 billing cycle totaling $.001427 per kilowatt-hour. A request for adjustment was submitted on October 15, 2002 and approval by the MPSC was granted on November 7, 2002. The new surcharge became effective with the December 2002 billing cycle and is $0.001328 per kilowatt-hour. In the servicing agreement between Consumers Funding and Consumers, Consumers is required to remit its Securitization Charge collections to the trustee each business day. Through December 31, 2002, Consumers had remitted approximately $53.5 million of Securitization Charge collections to the trustee, which was sufficient for the following scheduled payments of securitization bond principal, interest and related expenses:
Under the servicing agreement, Consumers is required to request periodic Securitization Charge adjustments from the MPSC. The request for an adjustment must be submitted at least 45 days before the adjustment may
take place. Adjustments will be made annually, and then quarterly beginning approximately one year before the expected final payment date of the last maturing class of securitization bonds. Adjustments to the Securitization Charge are based, among other things, on actual Securitization Charge revenue collections and updated assumptions by Consumers as to projected future deliveries of electricity to customers.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
None.
THIS REPORT IS A COPY OF THE PREVIOUSLY ISSUED ARTHUR ANDERSEN REPORT AND THIS REPORT HAS NOT BEEN REISSUED BY ARTHUR ANDERSEN LLP
The Arthur Andersen LLP report below is only included for the year ended December 31, 2001.
Report of Independent Accountants
We have audited the accompanying balance sheet of CONSUMERS FUNDING LLC (a Delaware limited liability corporation and wholly owned subsidiary of Consumers Energy) as of December 31, 2001, and the related statements of income, cash flows, and member's equity for the year ended December 31, 2001. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Consumers Funding as of December 31, 2001, and the results of its operations and its cash flows for the year ended December 31, 2001, in conformity with accounting principles generally accepted in the United States.
/s/ Arthur Andersen LLP
Detroit, Michigan, March 14, 2002.
REPORT OF INDEPENDENT AUDITORS
To Consumers Funding LLC:
We have audited the balance sheet of Consumers Funding LLC as of December 31, 2002, and the related statements of income, member's equity, and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of Consumers Funding LLC as of December 31, 2001, were audited by other auditors (who have ceased operations) whose report dated March, 14 2002, expressed an unqualified opinion on those statements.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the 2002 financial statements referred to above present fairly, in all material respects, the financial position of Consumers Funding LLC as of December 31, 2002, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States.
/s/ Ernst & Young LLP
Detroit, Michigan March 14, 2003
ITEM 8.
ITEM 8. Financial Statements and Supplementary Data
CONSUMERS FUNDING LLC STATEMENTS OF INCOME
The accompanying notes are an integral part of these statements.
CONSUMERS FUNDING LLC BALANCE SHEETS
The accompanying notes are an integral part of these Balance Sheets.
CONSUMERS FUNDING LLC STATEMENTS OF CASH FLOWS
The accompanying notes are an integral part of these statements.
CONSUMERS FUNDING LLC STATEMENTS OF MEMBER'S EQUITY
The accompanying notes are an integral part of these statements.
CONSUMERS FUNDING LLC
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND NATURE OF OPERATIONS
Consumers Funding, a Delaware limited liability company, whose sole member is Consumers Energy Company (Consumers), was formed by Consumers on October 11, 2000. On January 22, 2001, Consumers completed a $1,000 equity contribution to Consumers Funding. Consumers is an electric and gas utility and is a wholly owned subsidiary of CMS Energy Corporation. Consumers Funding was organized for the sole purpose of purchasing and owning securitization property (see below), issuing securitization bonds, pledging its interest in securitization property and other collateral to the trustee to collateralize the securitization bonds, and performing activities that are necessary, suitable or convenient to accomplish these purposes.
Securitization property represents the irrevocable right of Consumers, or its successor or assignee, to collect a nonbypassable Securitization Charge (Securitization Charge) from customers in accordance with the October 24, 2000 MPSC Financing Order (MPSC Financing Order). As modified by rehearing on January 4, 2001, the MPSC Financing Order authorizes the Securitization Charge to be sufficient to recover $468.6 million aggregate principal amount of securitization bonds, plus an amount sufficient to provide for any credit enhancement, to fund any reserves and to pay interest, redemption premiums, if any, servicing fees and other expenses relating to the securitization bonds. For financial reporting purposes, the purchase of the securitization property has been accounted for as a financing arrangement by Consumers Funding in the amount of $468.6 million. Accordingly, Consumers Funding has classified the purchase of securitization property as a securitization receivable from Consumers in the financial statements.
Consumers Funding's organizational documents require it to operate in a manner so that it would not be consolidated into the bankruptcy estate of Consumers in the event Consumers becomes subject to a bankruptcy proceeding. Consumers and Consumers Funding have agreed that in the event of Consumers' bankruptcy, the parties will treat the transfer of the securitization property to Consumers Funding as a true sale. The securitization bonds are treated as debt obligations of Consumers Funding. For financial reporting, Federal income tax and State of Michigan income and franchise tax purposes, the transfer of securitization property to Consumers Funding is treated as part of a financing arrangement and not as a sale. Furthermore, the results of operations of Consumers Funding are consolidated with Consumers for financial and income tax reporting purposes.
Consumers Funding is legally separate from Consumers. The assets and income of Consumers Funding, including without limitation, the securitization property, are not available to creditors of Consumers or CMS Energy Corporation.
On November 8, 2001, Consumers Funding issued $468.6 million of securitization bonds, Series 2001-1, in six different classes. Consumers Funding used the proceeds to fund the purchase of securitization property from Consumers. The principal amount of the securitization bonds, interest, fees and required overcollateralization for the securitization bonds, will be recovered through Securitization Charges collected from electric retail customers taking delivery of electricity from Consumers or its successor based on MPSC approved rate schedules and as permitted by contracts between Consumers and certain specific customers.
Consumers, as servicer, collects Securitization Charges from its customers and deposits collections daily into the General Subaccount held by the trustee (The Bank of New York). The trustee is required to use these funds to make principal and interest payments on the securitization bonds and to pay certain fees and expenses of Consumers Funding.
Consumers Funding has no employees. Under the servicing agreement with Consumers, Consumers is required to manage and administer the securitization property and to collect Securitization Charges on Consumers Funding's behalf. Consumers receives a monthly servicing fee of one twelfth times 0.25 percent of
the principal amount of securitization bonds outstanding as of the payment date. The servicing agreement also requires Consumers to file annual Securitization Charge adjustment requests with the MPSC. These Securitization Charge adjustment requests will be based on actual Securitization Charge revenue collections and Consumers' updated assumptions as to projected future deliveries of electricity to customers, expected delinquencies and write-offs, future payments and expenses relating to securitization property and the securitization bonds, any deficiency in the Capital or Overcollateralization Subaccounts and any amounts on deposit in the Reserve Subaccount.
2. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions. These estimates and assumptions affect the reported amount of revenues, expenses, assets, and liabilities and disclosure of contingencies. Actual results could differ from these estimates.
INCOME TAXES
Consumers Funding has elected not to be taxed as a corporation for Federal income tax purposes. Consumers Funding is treated as a division of Consumers, and accordingly, will not be treated as a separate taxable entity.
RESTRICTED CASH
The trustee has established the following subaccounts for the securitization bonds.
GENERAL SUBACCOUNT: The General Subaccount is comprised of Securitization Charge collections and interest earned from short-term investments. These amounts accumulate until the trustee pays principal, interest, service and administration fees and other expenses. At December 31, 2002, and December 31, 2001, the General Subaccount totaled $13.2 million and $1.3 million respectively. These funds are used by the trustee for the scheduled payments of principal and interest to bondholders and to pay expenses of Consumers Funding.
RESERVE SUBACCOUNT: The Reserve Subaccount includes any Securitization Charge collections in excess of the amounts required in the General, Overcollateralization and Capital Subaccounts. The trustee will draw funds from this subaccount if the General Subaccount is insufficient to make scheduled payments. At December 31, 2002, the Reserve Subaccount totaled approximately $1.7 million. There was no balance in the Reserve Subaccount at December 31, 2001.
OVERCOLLATERALIZATION SUBACCOUNT: On each payment date, the trustee will deposit in the Overcollateralization Subaccount a predetermined, specified amount so that the account balance reaches the required amount of $2.3 million, which represents 0.5 percent of the initial outstanding principal balance of the securitization bonds. If amounts available in the General Subaccount and the Reserve Subaccount are not sufficient on any payment date to make scheduled payments to the securitization bondholders and to pay the required expenses, fees and charges, the trustee will draw on the amounts in the Overcollateralization Subaccount to make those payments. At December 31, 2002, the Overcollateralization Subaccount totaled approximately $168,000. There was no balance in the Overcollateralization Subaccount at December 31, 2001.
CAPITAL SUBACCOUNT: The Capital Subaccount was established on November 8, 2001. Consumers deposited $2.3 million into the Capital Subaccount, an amount equal to 0.5 percent of the initial principal balance of the securitization bonds. If amounts available in the General Subaccount, the Reserve Subaccount and the Overcollateralization Subaccount are not sufficient on any payment date to make scheduled payments of
principal and interest to the securitization bondholders and to pay the expenses, fees and charges of Consumers Funding, the trustee will draw on amounts in the Capital Subaccount to make those payments. At December 31, 2002, and December 31, 2001, the Capital Subaccount contained a balance of $2.3 million.
3. LONG-TERM DEBT
On November 8, 2001, Consumers Funding issued $468.6 million of securitization bonds, in six classes at interest rates ranging from 2.59 percent to 5.76 percent. Consumers Funding used the proceeds from the securitization bonds to purchase securitization property from Consumers.
Scheduled maturities and interest rates for the securitization bonds at December 31, 2002 are as follows:
The amortization schedule for the securitization bonds provided for an initial payment to bondholders on July 20, 2002 and then quarterly thereafter. The following table provides the expected principal retirement of the securitization bonds over the next five calendar years (in thousands).
As scheduled, on July 20, October 20, 2002, and January 20, 2003, approximately $8.3 million, $7.3 million, and $6.7 million of the Class A-1 securitization bonds were retired, respectively.
4. FAIR VALUE OF FINANCIAL INSTRUMENTS
Restricted cash is on deposit with the trustee and, by definition, is carried at its fair value. At December 31, 2002, and 2001, Consumers Funding had a financial asset (representing its securitization receivable from Consumers) of approximately $443 million and $469 million respectively, and financial liabilities (representing the securitization bonds) with a cost basis of approximately $453 million and $469 million respectively. The securitization receivable and securitization bonds are carried at cost, which approximates
fair value. Fair value is estimated based on quoted market prices, or, in the absence of specific market prices, on quoted market prices of similar investments or other valuation techniques.
5. SIGNIFICANT AGREEMENTS AND RELATED PARTY TRANSACTIONS
Consumers Funding has a securitization receivable with Consumers Energy in the amount of approximately $443 million and $469 million, respectively, as of December 31, 2002, and December 31, 2001. Accordingly, Consumers Funding recognized interest income totaling $23 million and $3 million for the year ended December 31, 2002, and two months in 2001, respectively. In addition, Consumers Funding recognized other operating income from Consumers Energy totaling $1.4 million and $129,000 for the periods ended December 31, 2002, and 2001, respectively.
Under the servicing and administration agreements, Consumers is required to manage and administer the securitization property of Consumers Funding, and to collect the Securitization Charge on Consumers Funding's behalf. Consumers Funding pays Consumers a servicing fee (see Note 1) and an annual administrative fee. These fees are payable to Consumers on each scheduled quarterly payment date beginning July 20, 2002. For the years ended December 31, 2002, and 2001, Consumers Funding has recorded total expenses associated with these fees of $1.4 million and $129,000, respectively.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
In April 2002, Consumers Energy Company's Board of Directors, upon the recommendation of the Audit Committee of the Board, voted to discontinue using Arthur Andersen to audit the Consumers Fundings' financial statements for the year ending December 31, 2002. In May 2002, Consumers Energy Company's Board of Directors engaged Ernst & Young to audit Consumers Fundings' financial statements for the year ending December 31, 2002. For 2001, there were no disagreements or "reportable events" as described in Items 304 (a) (1) (iv) and (v) of Regulation S-K between Consumers Funding and Arthur Andersen.
PART III
ITEM 14.
ITEM 14. CONTROLS AND PROCEDURES
Omitted pursuant to Rule 13a-15(a) of the Securities and Exchange Act of 1934, as amended.
PART IV
ITEM 15.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
1. Financial Statements - included in response to Item 8.
2. Financial Statement Schedules.
None.
3. Exhibits.
See Exhibit Index that appears following the Signature page to this report.
(b) Reports on Form 8-K:
During the fourth quarter of 2002, Consumers Funding filed no Current Reports on Form 8-K
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 28th day of March 2003.
CONSUMERS FUNDING LLC
By /s/ Laura L. Mountcastle ---------------------------------------- Laura L. Mountcastle President, Chief Executive Officer, Chief Financial Officer and Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf of Consumers Funding LLC and in the capacities and on the 28th day of March 2003.
CERTIFICATION OF LAURA L. MOUNTCASTLE
I, Laura L. Mountcastle, certify that:
1. I have reviewed this annual report on Form 10-K of Consumers Funding LLC;
2. To the best of my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3. To the best of my knowledge, the financial statements included in this annual report provide the financial information required to be provided to the trustee under the governing documents of Consumers Funding LLC; and
4. Consumers Energy, as Servicer under the Securitization bonds, has complied with its servicing obligations and minimum servicing standards.
Date: March 27, 2003 By /s/Laura L. Mountcastle ------------------------------------- Laura L. Mountcastle President, Chief Executive Officer, Chief Financial Officer and Treasurer
INDEX TO EXHIBITS
The following Exhibits indicated by an asterisk preceding the Exhibit number are filed herewith. The balance of the Exhibits have heretofore been filed with the Commission and pursuant to Rule 12(b) - 32 are incorporated herein by reference.
Exhibit No. Description - ----------- ------------------- 3.1 Certificate of Formation of Consumers Funding LLC dated November 15, 2001. (Exhibit 4.2 to Consumers Funding S-3 dated October 13, 2000, File No. 333-47938)
3.1.1 Amended and Restated Certificate of Formation of Consumers Funding LLC dated as of November 8, 2001, which was filed with the Delaware Secretary of State's Office on November 6, 2001 (Exhibit 4.4 to Consumers Funding Form 8-K Report dated November 15, 2002, File No. 333-47938).
4.1 Limited Liability Company Agreement of Consumers Funding LLC (Exhibit 4.1 to Consumers Funding S-3 dated October 13, 2000, File No. 333-47938).
4.1.1 Amended and Restated Limited Liability Company Agreement of Consumers Funding LLC dated November 8, 2001. (Exhibit 4.2 to Consumers Funding Form 8-K Report dated November 15, 2001, File No. 333-47938)
4.2 Indenture dated as of November 8, 2001 between Consumers Funding LLC and the Bank of New York. (Exhibit 4.3.1 to Consumers Funding Form 8-K Report dated November 15, 2001, File No. 333-47938)
4.3 Series Supplement dated as of November 8, 2001 between Consumers Funding LLC and the Bank of New York. (Exhibit 4.3.2 to Consumers Funding Form 8-K Report dated November 15, 2001, File No. 333-47938)
10.1 Sale Agreement dated as of November 8, 2001 between Consumers Energy Company and Consumers Funding LLC (Exhibit 10.1 to Consumers Funding Form 8-K Report dated November 15, 2001, File No. 333-47938).
10.2 Servicing Agreement dated as of November 8, 2001 between Consumers Funding LLC and Consumers Energy Company. (Exhibit 10.2 to Consumers Funding Form 8-K Report dated November 15, 2001, File No. 333-47938).
10.3 Intercreditor Agreement dated as of November 8, 2001 among Canadian Imperial Bank of Commerce, Asset Securitization Cooperative Corporation, The Bank of New York, Consumers Funding LLC and Consumers Energy Company. (Exhibit 10.3 to Consumers Funding Form 8-K Report dated November 15, 2001, File No. 333-47938).
16 Letter from Arthur Andersen LLP to the Securities and Exchange Commission dated April 29, 2002, regarding change in certifying accountant (Exhibit 16.1 to Consumers Energy Form 8-K dated April 29, 2002, File No.1-5611)
99 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
After reasonable efforts, we have been unable to obtain Arthur Andersen LLP's consent to the incorporation by reference of their report for our fiscal year ended December 31, 2001 previously filed with our Form 10-K for the fiscal year ended December 31, 2001 and we have not filed that consent with this Annual Report on Form 10-K in reliance upon Rule 437a under the Securities Act of 1933. Because we have not been able to obtain Arthur Andersen LLP's consent, you may not be able to recover against Arthur Andersen LLP under Section 11 of the Securities Act of 1933 for any untrue statements of a material fact contained in our financial statements audited by Arthur Andersen LLOP or any omission to state a material fact required to be stated therein.